PIMCO is listing on May 1st the Global Advantage Inflation-Linked Bond Strategy Fund, which is an exchange-traded fund designed to offer investors the potential for long-term returns above inflation by actively managing global inflation-linked bonds and currencies.
The fund is managed by Mihir Worah, Managing Director and Head of PIMCO's Real Return portfolio management team.
According to PIMCO, the inflation-link bond fund uses global inflation-linked bonds and currencies to help diversify investors' inflation protection strategies. Importantly, it will also be actively managed against a gross domestic product-weighted benchmark, with the intent to better align investors' exposure to countries experiencing stronger growth. This is in contrast to traditional market-cap weighted benchmarks, which allocate relative to the inflation-linked bond issuance of each country.
"In this uncertain global economy, some of the key drivers of growth are developing economies, which are often more sensitive to inflationary pressures like commodity prices," said Worah. "Our forward-looking Global Advantage approach aims to expose investors to the inflation-linked bonds and currencies of these faster-growing economies, potentially resulting in higher real yields than traditional investing using market cap-weighting."
The fund will start trading on May 1 on the NYSE under the ticker ILB.
The Fund's primary benchmark index is the Barclays Capital Universal Government Inflation-Linked Bond Index. The Fund's secondary benchmark index is the PIMCO Global Advantage Inflation-Linked Bond Index. PIMCO says that the secondary benchmark reflects the fund's investment strategy more accurately than the primary benchmark.