November 03, 2009 08:00 ET

PIMCO Launches Tax Managed Real Return Fund

New Fund Taps PIMCO's Expertise in Inflation-Hedging Investments and Active Management of Tax-Efficient Municipal Bonds

NEWPORT BEACH, CA--(Marketwire - November 3, 2009) - PIMCO, a leading investment management firm, has launched the PIMCO Tax Managed Real Return Fund, an actively managed fund designed to provide tax-efficient income and a hedge against inflation. The new fund is co-managed by John Cummings, executive vice president and head of the firm's municipal bond desk, and Gang Hu, senior vice president and portfolio manager focused on inflation-hedging strategies.

The PIMCO Tax Managed Real Return Fund invests in a portfolio of high-quality, intermediate-maturity municipal bonds and other types of fixed income securities, with an overlay that looks to explicitly hedge against the deterioration in purchasing power that can be caused by inflation. High-quality municipal bonds can benefit tax-paying individuals and institutions because interest income from these bonds is exempt from federal and, in some cases, state taxes, and because they have relatively low default rates compared to similarly rated corporate bonds.

"With growing U.S. deficit projections and continued economic uncertainty, investors are facing the potential for higher taxes, elevated financial risks and the need to protect the purchasing power of their investments against inflation over time," said Cummings. "The PIMCO Tax Managed Real Return Fund combines PIMCO's leadership in inflation-hedging investments with our proven active management of tax-efficient mutual funds and represents another example of our firm's evolution as an investment solutions provider," said Cummings.

Potential benefits of the PIMCO Tax Managed Real Return Fund include:

--  Income from municipal bonds, which is exempt from federal and, in some
    cases, state taxes
--  A hedge against inflation, which aims to help preserve purchasing
--  Potential for capital gains from active management driven by PIMCO's
    rigorous investment process
--  PIMCO's proven risk management expertise

The ticker symbol for the institutional class shares of the PIMCO Tax Managed Real Return Fund is PTMIX; "P" shares trade under PTMPX; "A" shares under PTXAX; "C" shares under PXMCX and "D" shares under PXMDX.


PIMCO, founded in 1971, is a global asset management firm serving a full range of institutional and retail investors worldwide. Our reputation as one of the world's top asset managers rests on our combination of a long-term investment approach, superior client servicing and cutting edge technology. With offices in nine countries in North America, Europe and Asia, we manage investments across a full spectrum of global financial markets. Our success is built on our goal of consistently providing attractive returns while maintaining a strong culture of risk management and long-term discipline. PIMCO is owned by Allianz Global Investors, a subsidiary of the Munich-based Allianz Group, a leading global insurance company.

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund's prospectus, which may be obtained by contacting your PIMCO representative. Please read the prospectus carefully before you invest or send money.

Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax; a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes. Inflation-linked bonds (ILBs) issued by a government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the U.S. Government. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Please consult your tax and/or legal counsel for specific tax questions and concerns.

The value of most bond funds and fixed income securities are impacted by changes in interest rates. Bonds and bond funds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.

The credit quality of a particular security or group of securities does not ensure the stability or safety of the overall portfolio.

Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2009, PIMCO.

PIMCO Funds are distributed by Allianz Global Investors Distributors LLC, 840 Newport Center Drive, Newport Beach, CA 92660, (800) 927-4648.

Contact Information

  • Contact:
    Steven Vames
    PIMCO - Media Relations