PIMCO unveils GIS Inflation Strategy Fund
PIMCO has launched today the PIMCO GIS Inflation Strategy Fund, designed for investors looking to hedge global inflation risks while targeting enhanced real return opportunities.
The fund, which combines PIMCO’s real return expertise and risk factor-based approach to asset allocation, is managed by Mihir Worah, managing director and head of the real return portfolio management team.
It uses a multi-asset approach to identify the best way to protect against inflation by investing in a range of real assets such as global inflation-linked bonds, commodities, emerging market currencies, global real estate investment trusts and gold. PIMCO actively manages the asset allocation and underlying investments and incorporates tail risk hedging strategies intended to limit the impact of severe market shocks. These strategies are designed to protect against downside risk while positioning inflation-related assets to benefit from inflation dynamics. PIMCO defines tail risks as widespread, severe market declines.
“We believe that investors should always be prepared for the risk of rising inflation. The array of policies implemented by developed country governments and central banks to address the global financial crisis has resulted in unsustainably high debt levels and zero-bound nominal interest rates. While these policies have successfully suppressed the risk of deflation and depression risk posed by the crisis, they have also increased the risk of higher inflation in the years ahead,” Worah said.
The fund has been added to PIMCO’s UCITS compliant Global Investor Series (GIS) fund range. This Dublin-registered range now comprises 45 sub-funds with $150 billion (€117billion, £99 billion) under management as of 31 March 2013. With daily liquidity, investors can gain exposure to a broad range of asset classes, from the more traditional global and regional core fixed income funds, through credit portfolios, to asset allocation and alternative solutions. The funds are accessible in a variety of share classes in different currencies, depending on client requirements.