Money market funds have traditionally been the investment choice for cash management programs. These funds typically offer daily liquidity and a stable net asset value (NAV) at higher yields than a bank account or investment in U.S. Treasury bills. However, several factors have prompted many cash investors to look beyond money market funds to enhanced cash strategies. In today’s low-yield environment, many investors are searching for new approaches to cash management in an effort to generate positive returns without reducing the liquidity profiles of their portfolio.
PIMCO’s investment process
PIMCO is a large and active investor in short-term markets – from money-market to low duration strategies – with a focus on providing clients the benefit of liquidity and capital preservation, even in times of stress. As the landscape for investing short-term cash evolves, investors will likely face a declining supply of investable assets. Now more than ever, investors need a partnership offering expertise in liquidity management and capital preservation/appreciation to evaluate opportunities beyond less-effective traditional approaches. PIMCO believes an active approach to cash management may reveal relatively attractive opportunities while maintaining portfolio liquidity and potentially achieving returns beyond the near-zero percent yields offered by many alternatives.
We feel short-term strategies at PIMCO benefit from our unique macro and microeconomic forecasting and expertise in fixed income analysis. Combining an appreciation for the global macro environment with constant monitoring of regulatory changes and structural market forces helps us to identify under-appreciated asset classes, both from a liquidity and return perspective. PIMCO does not rely on one method alone in this uncertain and low-yield environment. Our short-term desk utilizes a complete and dynamic approach to liquidity management, actively using our expansive resources to assess and evaluate opportunities globally across a variety of risk factors including duration, credit and sectors.
An experienced and dedicated team of portfolio managers comprise a key desk at PIMCO by managing liquidity and forming the firm’s overall short-term strategy. We partner with prominent institutional investors to address their unique and changing cash management needs via strategies designed to enhance returns on a risk-adjusted basis and minimize the negative effect of a near-zero rate environment. In an economy that is reflating due to secular pressures, positive risk-adjusted real returns may provide investors another tool for preserving principal while maintaining liquidity.
PIMCO’s short-term 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.