What Is PIMCO (Pacific Investment Management Co.)?
PIMCO, or the Pacific Investment Management Company, is an American investment management firm founded in 1971 in California. The firmfocuses on fixed income and manages more than $2.2 trillion in assets. The firmprimarily handles portfolio management, account management, and business management.
PIMCO specializes in fixed-income securities. It manages the internationally known Total Return Fund. The company servesinstitutional investors, high-net-worth individuals, and individual investors with 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. The firm launched with a total of $12 million in assets and the belief that bonds should be actively traded to enhance returns.
The firm has since expanded to derivatives, mortgage-based securities, emerging markets, and other sectors of the global fixed income market. It has grown to be one of the largest asset management firms in the world. Once a unit of Pacific Mutual Life Insurance, it is now owned by German financial services firm Allianz SE.
As of 2014, Gross had left the firm for Janus Capital Group, Inc. Gross' heir-apparent, Mohamed El-Erian, also departed. In April 2015, former Federal Reserve Chair Ben Bernanke was hired as a senior advisor to PIMCO.
PIMCO'sStrategies
PIMCO's investment process integrates insights from its Cyclical Forums, which anticipate market and economic trends over a 6- to 12-month period, and the annual Secular Forum, which projects trends over a 3- to 5-year period. The company says it believes that an informed macroeconomic outlook—over long- and short-term horizons—is key to identifying opportunities and potential risks.
PIMCO's Total Return Fund
The company's Total Return Fund seeks to maximize capital while preserving capital. The fund, established in 1987, emphasizeshigher-quality, intermediate-term bonds and is more globally diversified, therefore aiming to reduce concentration risk. The fund also has flexibility that helps respond to changing economic conditions.
The fund pays a monthly dividend and covers the U.S. investment-grade, fixed-rate bond marketwith index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
PIMCOToday
As per the company's website, PIMCO has more than3,050 employees who work in offices throughout the Americas, Europe, and Asia. The company boasts more than 900 global investment professionals and more than 260 portfolio managers. As of June 2021, the company managed more than $2.20 trillion in assets.
The company partners with different institutions, from corporations, central banks, private and public pension funds, endowments, and foundations, as well as retirement plans.
