PIMCO Announces Bond Fund 'Un-tethered' from Benchmark

PIMCO announced the launch of the PIMCO Unconstrained Bond Fund (UBF), which uses the firm's investment process and is not tethered to benchmark-specific guidelines.

The UBF is managed by PIMCO Managing Director and Portfolio Manager Chris Dialynas. The ticker symbol for the fund is PFIUX, according to the company.

Benefits of the UBF for investors include:

  • Traditional characteristics of a core bond fund such as limited downside risk, low correlation with equities, liquidity and diversification;
  • Potential to outperform traditional active fixed-income management approaches where the manager may be expected to limit tracking error relative to a benchmark;
  • May invest in derivative instruments such as options, futures contracts, or swap agreements;
  • May invest in mortgage and asset-backed securities;
  • May invest in securities denominated in foreign currencies;
  • Up to 50% of assets of the UBF can be invested in securities and instruments economically tied to emerging market countries; and
  • Up to 40% of assets of the UBF can be invested in high yield corporate bonds.

“The underlying strategy of the UBF provides greater scope to adjust duration exposure, allocate across sectors, express our active views, and tap into our global fixed income toolkit beyond what is possible with benchmark-oriented funds,” said Dialynas, in a company announcement.

More information is available at www.pimco.com.