What is it?
The PIMCO All Asset fund (Prospectus / Fact Sheet) is known as a “fund of funds” because it has several different kinds of funds with different strategies. Each fund holds different types of investments such as bonds, TIPS (Treasury Inflation Protection Securities), commodities, real estate, emerging-markets debt, equities, and alternative assets. Because of the broad inclusion of investments, it is considered an “All Asset” fund.
How does it work?
The PIMCO All Asset fund is an actively managed portfolio. The fund manager goes in and out of the various underlying PIMCO funds using a tactical asset allocation strategy seeking to create appreciation and income by buying and selling different funds across different assets. The fund does have a prebuilt allocation, but if the fund manager believes there is an opportunity in a particular investment, they will shift the portfolio to try and capture the opportunity. Once the opportunity has been captured or is no longer an opportunity, they will revert to the original preset allocation.
Risk
Due to the broad nature of the investments in the fund and its global reach, the fund does carry several risks including currency risk, distressed investments, interest rate risk, leverage, sovereign debt, potential loss of principal, and market volatility. The fund manager also has broad discretion over the allocation of the fund, which can cause the level of risk to fluctuate. For example, if the fund goes from 60% bonds and 40% stocks (a generally conservative stance) to 20% bonds and 80% international stock, the level of risk has increased.
Benefit
The benefit of this fund is that it gives investors access to a broad range of different investment assets with the potential of capturing short-term gains in various opportunities in the market. However, the level of risk in this fund can change because assets are moved to capture short-term gains.
In a portfolio
The PIMCO All Asset fund can be a good hedge against inflation as it tries to capture short-term gains by moving assets through various investments and strategies. It also holds treasury inflation protections as a part of its general allocation to protect assets against inflation. However, keep in mind the fund’s risk and investment strategy can shift frequently.
This is not an offer. Securities can be offered by the prospectus only. The PIMCO All Asset fund is not suitable for all investors and the prospectus should be read carefully by an investor before investing. Investors are advised to consider the investment objectives, risks, charges and expenses carefully before investing. This prospectus, which is available at SEC.gov and weabenefits.com/investments, and may be obtained by calling 1-800-279-4030, contains this and other information about the fund. Securities offered through WEA Investment Services, Inc. Member FINRA.