PIMCO has joined the retirement income race with its Real Income Funds, a suite of mutual funds that ladder investments in TIPS to serve as an anchor for retirees' portfolios by offering them steady monthly income, inflation hedging and liquidity.
Initially, the funds will be offered in maturities of 2019 and 2029; up until those dates, when the funds will be depleted, they will draw down principal and interest to provide a steady stream of income.
“The PIMCO Real Income Funds are an innovative investment solution for retirees,” said PIMCO Executive Vice President and Retirement Product Manager Tom Strieff. “The funds are a natural fit with annuity products and seek to supplement Social Security, defined benefit plans and other sources of retirement income in a manner that helps cushion against inflation.”
PIMCO noted that it has been one of the most active participants in the TIPS market since its creation in 1997 and that TIPS principals are backed by the U.S. government. PIMCO Senior Vice President and Portfolio Manager Gang Hu will manage the funds.