4 / 5 Stars
3 3 4 3 1
Zacks Investment Research
5 (Strong Sell)
Standard & Poor's
4 / 5 Stars
U.S. News evaluated 98 Tactical Allocation Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
Note: Profile written for different share class.
The fund has returned 10.91 percent over the past year, 6.27 percent over the past three years, 9.72 percent over the past five years.
|Trailing Returns||Updated 06.30.2014|
|Year to date||6.7%|
|3 Years (Annualized)||6.3%|
|5 Years (Annualized)||9.7%|
|10 Years (Annualized)||6.7%|
PIMCO All Asset is a fund of funds in which manager Robert Arnott moves quickly in and out of positions in various underlying PIMCO funds. The fund does what its name suggests and invests in a wide range of assets.
As of July 03, 2014, the fund has assets totaling $34.62 billion. Its portfolio consists of a number of underlying PIMCO Real Return, StockPLUS, and bond funds.
After a near collapse in the financial system, manager Robert Arnott took advantage of historically low valuations in sectors like emerging-markets debt and high-yield securities that paid off for the fund, according to Morningstar. The fund is made up of more than 30 underlying PIMCO funds, which include bond funds, inflation-protected bond funds, and some variations of stock indexing through PIMCO StockPLUS funds, according to Morningstar. About 15 percent of the fund's total assets are currently invested in PIMCO Fundamental Advantage Total Return Strategy, which is a long-short fund that invests in a enhanced stock index fund and PIMCO Total Return bond fund. Arnott has also loaded up on PIMCO Unconstrained Bond, which invests in a wide range of fixed-income securities and can actually short bonds. The fund has returned 10.91 percent over the past year and 6.27 percent over the past three years.
Arnott says he looks to “broaden tactical allocation beyond stocks, bonds, and cash because investors already have stocks, bonds, and cash.” Arnott uses a number of strategies like investing in stock index futures through the underlying funds to get equity exposure in a nontraditional sense. “There are a lot of ways of building an equity portfolio,” he says. Generally, equity strategies play a small part in the fund’s strategy. PIMCO managers are given leeway to invest in derivatives and other futures trading, which involves not actually buying bonds but instead holding contracts for future sales. The fund has returned 9.72 percent over the past five years.
Management doesn’t invest directly in any stocks or bonds but rather in a number of underlying PIMCO Real Return, StockPLUS, and other bond funds, which makes it a fund of funds. A single underlying PIMCO fund will never make up more than 50 percent of the fund’s portfolio, according to the prospectus. “Arnott favors PIMCO Real Return funds, which use TIPS, commodities, and real estate, and he may allocate up to 75 percent of assets in those strategies,” according to Morningstar.
Role in Portfolio
Morningstar assigns the fund a “supporting player” role, saying, “The fund can be a useful complement to a stock/bond portfolio.”
PIMCO chose Robert Arnott of Research Affiliates to manage the allocation of the fund’s assets.
PIMCO All Asset Fund has an expense ratio of 0.47 percent.
Investors rely on Arnott to move among positions in different PIMCO funds, which all follow a similar companywide strategy. Many PIMCO funds use derivatives or other futures strategies, so at times it can difficult for investors to understand exactly what the funds are holding.