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US StocksPLUS
Investment Style
StocksPLUS is a unique equity strategy which offers the potential for consistent excess returns over the S&P 500 while maintaining a very similar risk profile to that of the index. PIMCO manages StocksPLUS by combining a non-leveraged position in synthetic S&P 500 Index instruments (primarily Index futures and sometimes Index swaps) with a short duration fixed income portfolio. The synthetic S&P 500 Index instruments capture the returns of the Index, while our active management of the short duration fixed income assets seeks to add incremental return above the Index. Because the S&P futures contracts are priced such that a combination of futures and money market investments should produce a return equal to that of the S&P index, our active management of the short duration assets seeks to outperform money market rates, thereby generating an incremental return over the S&P 500. Sometimes referred to as an enhanced index strategy, StocksPLUS combines the benefits of index fund management with the potential for excess returns, at lower volatility of relative performance (tracking error) than is commonly associated with fully active equity management styles.
Benchmark
S&P 500 Index
Portfolio Duration
Duration is not expected to normally exceed one year.
Market Sectors Utilized
Large Cap Equity backed by a diversified, short-term bond portfolio
Value Added

StocksPLUS seeks to add value above the equity index by outperforming the money market based financing rate associated with equity futures and swaps. The sources of value added stem from a longer term horizon of institutional equity investors relative to the short-term, money marke rate. Key sources of value add include:

Active Short Duration Management
Credit Analysis (Risk Premiums)
Yield Management
Bottom Up Techniques to Identify Undervalued Securities
Quantitative Research
Cost Efficient Trading

For more information, please go to the Contact Us page.

 

 


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