In an investment environment defined by fair-to-rich valuations and lower yields, static buy-and-hold asset allocation approaches relying on broad market exposures are likely to deliver subpar returns. Achieving investment goals in today’s environment requires a dynamic approach to asset allocation across a global investment opportunity set and a focus on risk management.
PIMCO believes returns from traditional asset classes are likely to be lower than their historical averages for the foreseeable future. Many asset classes have ridden a global wave of easy monetary policy helping drive exceptionally strong returns since the financial crisis. But these higher valuations coupled with low starting yields mean prospective returns of most assets are likely to be lower.
While static, buy-and-hold asset allocation approaches may disappoint in this environment, a tactical, flexible asset allocation strategy has the potential to offer more upside and manage downside risk. On average, the spread between the top- and bottom-performing asset classes has been 45% since the year 2000, creating significant potential for a skilled manager to increase return and manage downside risk through tactical asset allocation.
PIMCO’s Asset Allocation Strategies provide an “all-in-one” global asset allocation strategy designed to serve as a core holding in investor portfolios. Using a globally diversified investment approach, a team of highly experienced portfolio managers tactically allocate assets across the full spectrum of liquid asset classes, regions and sectors. This flexibility enables them to target attractive risk-adjusted returns and consistent outperformance over the benchmark.
PIMCO’s investment process
PIMCO’s Asset Allocation Strategies invest across the full spectrum of liquid asset classes, including global stocks and bonds, real assets, currencies and liquid alternative strategies to access the most attractive investment opportunities. Additionally, highly flexible investment guidelines and tactical investment approach allow our strategies to quickly adapt to changing market conditions.
Our strategies benefit from PIMCO‘s investment process, which is a unique combination of rigorous top-down macro views and significant bottom-up research expertise. Our top-down investment process is well known and has been proven over the past four decades. What may be less well known is our deep bench of over 260 portfolio managers and over 60 research analysts providing valuable bottom-up insights and ideas across all asset classes. It’s this combination that’s important. Our top-down process helps the portfolio managers identify the key macro catalysts and market turning points, while our deep bottom-up expertise allows them to get the most out of asset classes by identifying the most compelling individual securities to build asset class exposures.
PIMCO’s Asset Allocation Strategies are managed by a highly experienced team with 17 years of average investment experience and extensive backgrounds in asset allocation and multi-asset investing at PIMCO or highly regarded macro hedge funds. As such, investors in our strategies can access world-class investment talent in either a separate account or fund structure.
PIMCO’s Asset Allocation expertise can be accessed via funds and customized separate accounts that are designed to fit your investment needs. Please contact your PIMCO representative for more information.