PIMCO RAE Fundamental Advantage PLUS Fund INSTL (PFATX)

Prior to 15 April 2015, the PIMCO RAE Fundamental Advantage PLUS Fund was named the PIMCO Fundamental Advantage Absolute Return Strategy Fund.

PIMCO
Objective
Seeks maximum total return, consistent with prudent investment management
Primary Portfolio
Derivatives providing long exposure to the Enhanced RAFI U.S. Large Index hedged by short exposure to the S&P 500 Index, backed by an actively managed portfolio of fixed income securities with an absolute return orientation
At a Glance
SymbolPFATX
CUSIP Number 72201F110
Total Fund Assets (in millions) $2,478.1
Share Class Inception Date 02/29/2008
Dividend Frequency Quarterly
Maximum Sales Charge -
Net Operating Expenses 0.89 %

Daily Price

NAV Day Return
$3.62 $0.000.00%
YTD Return
-1.24%
As of 04/24/15

Historical Prices

04/21/15

$3.62

04/22/15

$3.62

04/23/15

$3.62

Performance quoted represents past performance and is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than average annual returns shown. Performance quoted does not reflect any sales charges, if applicable, and performance would be lower if it did. Click Performance tab for performance current to the most recent month-end.
Fund Overview
A unique smart beta-based market neutral equity strategy

The Lipper award-winning fund combines long exposure to Research Affiliates Equity (RAE) Fundamental, a smart beta-based equity strategy, with an equivalent short position in the S&P 500 Index and then complements this equity market neutral exposure with an additional source of return potential from an absolute return bond alpha strategy.


Why Invest In This Fund
Strong diversification potential

The fund provides investors with the potential for unique diversification benefits as both sources of return typically exhibit a low correlation with the equity market and with one another. As most investment portfolios are overwhelmingly dominated by equity market risk, the addition of the strategy to a traditional investment portfolio may have meaningful risk diversification benefits.


Smart beta-based equity exposure PLUS

Long equity portfolio construction is based on Research Affiliate’s smart beta approach, the RAFI Fundamental Index, which selects and weights stocks based on non-price measures of company size. This approach aims to avoid a pitfall of market-cap indexing – overweighting overvalued and underweighting undervalued stocks. In addition, active insights are incorporated into the equity portfolio construction process with the objective of achieving attractive risk-adjusted returns.


Two independent sources of return

The fund’s long equity exposure is fully offset by short exposure to the S&P 500, and supplemented by a full discretion absolute return bond alpha strategy with the goal of achieving attractive risk-adjusted returns for investors. Absolute return portfolios may not necessarily fully participate in positive market rallies or negative market declines.


Our Expertise

PIMCO helped pioneer the innovative StocksPLUS strategy in 1986 – the same award-winning approach used across our “PLUS” portfolios, which capitalizes on the depth and breadth of PIMCO’s global resources. Research Affiliates introduced fundamental indexes to the marketplace in 2005 and is broadly recognized as a premier provider of and thought leader behind smart beta. Today, we manage RAE “PLUS” portfolios across a range of objectives and market exposures.

Managers

Mohsen Fahmi

Mr. Fahmi is a managing director and generalist portfolio manager in the Newport Beach office, focusing on global fixed income assets. Prior to joining PIMCO in 2014, he was with Moore Capital Management, most recently as a senior portfolio manager and previously as chief operating officer. In London earlier in his career, he was co-head of bond and currency proprietary trading at Tokai Bank Europe, head of leveraged investment at Salomon Brothers and executive director of proprietary trading at Goldman Sachs. Prior to this, he was a proprietary trader for J.P. Morgan in both New York and London, and he also spent seven years as an investment officer at the World Bank in Washington, DC. He has 30 years of investment experience and holds an MBA from Stanford University. He received a master's degree in civil engineering from the Ohio State University and an undergraduate degree from Ain Shams University, Cairo.

Sudi N. Mariappa

Mr. Mariappa is a managing director and generalist portfolio manager in the Newport Beach office. He rejoined PIMCO in 2014 from GLG, a London-based hedge fund, where he was a managing director, developing and managing fixed income funds. Previously at PIMCO, Mr. Mariappa was a managing director and head of global portfolio management. He also served as a senior advisor to PIMCO’s portfolio management group from 2009-2011. Prior to joining PIMCO in 2000, he was a managing director for Merrill Lynch in Tokyo, overseeing Japanese government bond and swap derivative trading. He has 27 years of investment experience and holds an MBA, as well as a bachelor's degree in chemical engineering, from Cornell University.

Robert Arnott

Mr. Arnott is the founder and chairman of Research Affiliates, a subadvisor to PIMCO. In 2002, he established Research Affiliates as a research-intensive asset management firm that focuses on innovative asset allocation and alternative indexation products. He previously served as chairman of First Quadrant, as president of TSA Capital Management (now part of Analytic Investors), and as vice president at The Boston Company. He also was global equity strategist at Salomon Brothers. He has published more than 100 articles in journals such as the Journal of Portfolio Management, the Harvard Business Review and the Financial Analysts Journal, where he also served as editor in chief from 2002 through 2006. He graduated summa cum laude from the University of California, Santa Barbara, in 1977 in economics, applied mathematics and computer science.

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus and summary prospectus, if available, which may be obtained by contacting your investment professional or PIMCO representative.  Click here for a complete list of the PIMCO Funds prospectuses and summary prospectuses. Please read them carefully before you invest or send money.

A word about risk: In managing the strategy’s investments in Fixed Income Instruments, PIMCO utilizes an absolute return approach; the absolute return approach does not apply to the equity index replicating component of the strategy. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk; investments may be worth more or less than the original cost when redeemed. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Entering into short sales includes the potential for loss of more money than the actual cost of the investment, and the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the portfolio. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss.

Past performance is not a guarantee or a reliable indicator of future results. For funds with at least a 3-yr history, Morningstar calculates a Morningstar Rating based on a risk-adjusted return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees) with an emphasis on downward variations and consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating is a weighted average of the performance figures for its 3-, 5- and 10-yr (if applicable) Morningstar Rating metrics. Morningstar, Inc.® 2015. All rights reserved. The information contained herein; (1) is proprietary to Morningstar and/or its affiliates; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Hollow stars represent a class of shares with inception dates that is different than the inception date of the fund. For the period prior to the inception date of these shares, performance information is based on the performance of the fund’s Institutional Class shares, adjusted to reflect the actual distribution and/or service (12b-1) fees and other expenses paid by the newer share class.