2 Unorthodox Equity Funds From PIMCO
StocksPLUS and StocksPLUS Absolute Return provide exposure to the S&P 500 while also seeking to outperform the index by investing in bonds.
Patricia Oey: PIMCO has a family of funds known as StocksPLUS funds, which are equity funds that capitalize on what PIMCO does best, which is bond investing. For these funds, PIMCO uses swaps or futures for exposure to an equity index, such as the S&P 500 or the MSCI EAFE, and invests the excess cash in an actively managed bond portfolio. Essentially, the bond strategy is the fund's potential source of alpha.
PIMCO has two offerings that provide exposure to the S&P 500: there is StocksPLUS, whose bond strategy seeks to return about 75 to 125 basis points, before fees. There is also StocksPLUS Absolute Return, which has a higher return target of 200 to 300 basis points, before fees.
Patricia Oey does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.