The PIMCO Global Multi-Asset Fund is presented as follows (my highlights):
- Strategy Overview
In a complex and constantly evolving global economy where sudden market shocks or “black swans” occur with alarming frequency, investors need to reassess how to best achieve their investment objectives while managing downside risk. In the new investment landscape, simply investing in stocks and bonds may not be enough and investors should consider additional sources of portfolio diversification. The Global Multi-Asset strategy is a comprehensive asset allocation solution and designed to be a complete expression of PIMCO’s macroeconomic investment views across major asset classes including global equities, global bonds, diversified commodities and real estate.
The strategy combines a differentiated “risk factor”–based approach to asset allocation with PIMCO’s strategic insight on the global macroeconomy to construct a portfolio that is highly diversified not only across asset classes, but also across global risk factors. Another key differentiating feature of the investment strategy is the use of a systematic approach to tail risk hedging that seeks to help protect the portfolio against sudden market shocks by purchasing inexpensive hedges across various liquid markets.
The strategy offers daily liquidity to investors and obtains desired portfolio exposures through a combination of various PIMCO strategies, unaffiliated funds (e.g., Exchange Traded Funds [ETFs]) and direct security holdings. The portfolio is managed by a team of three highly experienced portfolio managers, led by Dr. Mohamed El-Erian, PIMCO’s CEO and co-CIO.
http://www.pimco.com/EN/Solutions/Pages ... Asset.aspx
PIMCO Global Multi Asset (PGMAX) = -8.2%
Stock (ACWI) = +18%,
Bonds (US TBM) = -2%
Annualized return over last 5 years (close to since inception date of 10/8/2008):
PIMCO Global Multi Asset (PGMAX) = 5.5%
iShares MSCI ACWI = 14.3%
Vanguard Total Bond Market = 5.2%
The tax cost of the PIMCO fund has been about 2% per year (higher than the Vanguard TBM) - which equates to about an after tax return of 3.5% since inception.
The fund strategy seems to be a form of marketing timing (temporal macroeconomic risk hedging) as I understand - which seems difficult to do - even for a 15 year IMF veteran, ex-manager of the Harvard Endowment, and author of the much acclaimed "When Markets Collide" book ( http://en.wikipedia.org/wiki/Mohamed_A._El-Erian ). Maybe the fund performance will improve over time, but since inception a portfolio of just stock and bonds looks fairly good in comparison. Obviously no guarantees.
Robert
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