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. In this 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. 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 significant, 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 the fund’s assets across the full spectrum of liquid asset classes, regions and sectors. This flexibility enables PIMCO to target attractive risk-adjusted returns and consistent outperformance over the benchmark.