Pimco, a US-based investment management firm, has unveiled two low duration funds to support investors concerned with interest rate risk.
The new funds added to Pimco’s offshore fund range include the Pimco GIS Global Low Duration Real Return fund and the Pimco GIS Low Duration Global Investment Grade Credit fund.
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The two funds will be managed by Pimco’s deputy chief investment officers, Mihir Worah and Mark Kiesel respectively. They have a lower sensitivity to changes in interest rates.
The Pimco GIS Low Duration Global Investment Grade Credit fund will invest in short dated corporate bonds and will aim to capture alpha with less sensitivity risk to interest rate rises.
Pimco said that the Pimco’s Real Return fund will invest in inflation linked bond allocations but will aim to achieve a low risk profile.
Additionally, Worah currently serves as head of the firm’s real return portfolio management team and Kiesel serves as global head of the corporate bond portfolio management team.
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By GlobalDataKiesel said: "Investors are looking for solutions to lower their overall exposure to interest rates in a potentially rising rate environment. This new strategy can provide investors with the opportunity to participate in the short dated segment of the global credit market, providing more flexibility and less sensitivity to interest rate risk than a traditional global credit strategy."
Worah said: "While these policies have successfully suppressed the risk of deflation and depression posed by the crisis, they have also increased the risk of higher inflation in the years ahead. This new strategy helps investors to better address the risk of higher inflation and rising rates."
