What Is PIMCO (Pacific Investment Management Co.)?
PIMCO, or Pacific Investment Management Company, is an American investment management firm founded in 1971 in California. The firm focuses on fixed income and manages more than $1.92 trillion in assets. The firm primarily handles portfolio management, account management, and business management.
PIMCO specializes in fixed income securities. It manages the internationally known Total Return Fund. The company serves institutional investors, high-net-worth individuals, and individual investors with its account services and mutual funds.
Understanding PIMCO (Pacific Investment Management Co.)
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.
- 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.
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 Chairman Ben Bernanke was hired as a senior advisor to PIMCO.
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, emphasizes higher-quality, intermediate-term bonds and is more globally diversified, therefore aiming to reduce concentration risk. The fund also has a flexibility that helps respond to changing economic conditions.
The fund pays a monthly dividend and covers the U.S. investment-grade, fixed-rate bond market with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.
As per the company's website, PIMCO has more than 2,900 employees who work in offices throughout the Americas, Europe, and Asia. The company boasts more than 820 global investment professionals and 260 portfolio managers. As of June 2020, the company managed more than $1.92 trillion in assets.