What Is PIMCO (Pacific Investment Management Co.)?
Let me tell you about PIMCO, which stands for Pacific Investment Management Company—it's an American investment management firm I know was founded in 1971 in California. The firm focuses on fixed income and handles more than $2.2 trillion in assets. You'll see it primarily deals with portfolio management, account management, and business management.
PIMCO specializes in fixed-income securities, and it manages the well-known Total Return Fund. The company serves institutional investors, high-net-worth individuals, and individual investors through its account services and mutual funds.
Key Takeaways
- PIMCO is an American investment company that focuses on fixed-income investments.
- The most famous product in PIMCO's portfolio is its Total Return Fund, a bond-based mutual fund.
- Different PIMCO products are geared toward institutional investors and individual investors.
Understanding PIMCO
PIMCO was founded in 1971 in Newport Beach, California, by Bill Gross, Jim Muzzy, and Bill Podlich. They started with $12 million in assets, believing that bonds should be actively traded to boost returns.
Since then, the firm has expanded into derivatives, mortgage-based securities, emerging markets, and other areas of the global fixed income market. It has become one of the largest asset management firms worldwide. It was once a unit of Pacific Mutual Life Insurance but is now owned by the German financial services firm Allianz SE.
As of 2014, Bill Gross left for Janus Capital Group, Inc., and Mohamed El-Erian, his heir-apparent, also departed. In April 2015, former Federal Reserve Chair Ben Bernanke was hired as a senior advisor to PIMCO.
PIMCO's Strategies
PIMCO's investment process integrates insights from its Cyclical Forums, which look ahead to market and economic trends over 6 to 12 months, and the annual Secular Forum, which projects trends over 3 to 5 years. The company holds that an informed macroeconomic outlook—both long- and short-term—is essential for spotting opportunities and risks.
PIMCO's Total Return Fund
The Total Return Fund aims to maximize capital while preserving it. Established in 1987, it emphasizes higher-quality, intermediate-term bonds and is more globally diversified to cut down on concentration risk. The fund has flexibility to adapt to changing economic conditions.
It pays a monthly dividend and covers the U.S. investment-grade, fixed-rate bond market, including government and corporate securities, mortgage pass-through securities, and asset-backed securities.
PIMCO Today
According to the company's website, PIMCO has more than 3,050 employees in offices across the Americas, Europe, and Asia. It includes over 900 global investment professionals and more than 260 portfolio managers. As of June 2021, it managed more than $2.20 trillion in assets.
The company partners with various institutions, including corporations, central banks, private and public pension funds, endowments, foundations, and retirement plans.
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