Investment management firm PIMCO together with Research Affiliates has launched six equity funds which are designed to outperform market benchmarks through a fundamental index-based approach that incorporates active insights.
The six funds, which expand upon the more than decade-long collaboration between PIMCO and Research Affiliates, will cover U.S. Large, U.S. Small, International, Global, Global ex-U.S. and Emerging Markets.
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The strategies select stocks based on non-price measures of company size such as sales, cash flow, book value and dividends.
By removing stock price from the portfolio construction process, the funds seek to capitalize on market inefficiencies, systematically capturing returns when prices deviate from fundamentals and therefore outperforming market cap-weighted indices over time.
In addition, portfolio weights will be refined through the use of research-based active insights designed to further enhance risk-adjusted returns.
The RAE Fundamental funds are part of PIMCO’s Enhanced Equity suite, which also includes StocksPLUS and RAE Fundamental PLUS funds.
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By GlobalDataPIMCO’s equity solutions total more than $50bn in assets under management.
PIMCO managing director and equity product manager Sabrina Callin said: "In a low return world, investors are looking for approaches that provide meaningful return on top of what the market delivers, which can make a big difference over the long term. PIMCO’s Enhanced Equity strategies provide investors with a range of equity offerings that are designed to achieve this goal."
The six new funds and the ticker symbols for their respective institutional shares are as follows:
-RAE Fundamental US Fund (PKAIX)
-RAE Fundamental US Small Fund (PMJIX)
-RAE Fundamental International Fund (PPYIX)
-RAE Fundamental Global Fund (PFQIX)
-RAE Fundamental Global Ex-US Fund (PZRIX)
-RAE Fundamental Emerging Markets Fund (PEIFX)
