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Fund Spy: Morningstar Medalist Edition

PIMCO Total Return Will Not Be Changing Its Stripes

Manager Bill Gross is embracing flexibility, but not all-out change.


It's important for investors to know what  PIMCO Total Return (PTTRX) will and will not be.

In institutional lingo, this is a "core-plus" offering. It keeps its rate sensitivity in a range around its benchmark, the Barclays U.S. Aggregate, invests in the same sectors as the index, and can add some out-of-benchmark bonds. That gives the fund a broad palette. Manager Bill Gross has historically made large bets using the fund's benchmark sectors (in particular with agency mortgages), has peppered in nonbenchmark holdings such as emerging-markets and nonagency mortgage debt, and has long used interest-rate bets to try to improve returns.

Eric Jacobson has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.