Trends Composite
Executive Summary
PIMCO TRENDS MANAGED FUTURES STRATEGY OBJECTIVES: The Strategy seeks to achieve its investment objective by pursuing a quantitative trading strategy intended to capture the persistence of price trends (up and/or down) observed in global financial markets and commodities. The Strategy's investment strategy represents a composite of financial and commodity futures designed to provide exposure to global financial market and commodity price trends. Within the strategy's allocations, contracts are positioned either long or short based on various characteristics related to their prices. When making allocation decisions for the strategy, PIMCO considers various qualitative and quantitative factors relating to the U.S. and non-U.S. economies, and securities and commodities markets. PIMCO uses these qualitative and quantitative factors to help determine the Strategy's target asset allocation and to identify potentially attractive relative value and risk hedging strategies.
The Strategy will invest under normal circumstances in derivative instruments linked to interest rates, currencies, mortgages, credit, commodities (including individual commodities and commodity indices), equity indices and volatility-related instruments. The Strategy invests in derivative instruments, including futures, options on futures, options and swap agreements. The Strategy may invest in derivative instruments on a speculative basis. The Strategy's investments in derivative instruments will be backed by a portfolio of cash equivalent securities and short to intermediate duration Fixed Income Instruments. "Fixed Income Instruments" include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.
The Strategy may seek to gain exposure to the commodity futures markets primarily through investments in swap agreements and futures, and through investments in the PIMCO Cayman Commodity Fund VIII, Ltd., a wholly-owned subsidiary of the Strategy organized under the laws of the Cayman Islands (the "Subsidiary"). The Strategy may invest up to 25% of its total assets in the Subsidiary. The Subsidiary is advised by PIMCO, and has the same investment objective as the Strategy. The value of commodity-linked derivative instruments may be affected by overall market movements and other factors affecting the value of a particular industry or commodity, such as weather, disease, embargoes, or political and regulatory developments. The Strategy and the Subsidiary may also temporarily hold physical commodities directly as a means of settling derivatives transactions.
The Strategy may also invest in leveraged or unleveraged commodity index-linked notes, which are derivative debt instruments with principal and/or coupon payments linked to the performance of commodity indices. These commodity index-linked notes are sometimes referred to as "structured notes" because the terms of these notes may be structured by the issuer and the purchaser of the note. The value of these notes will rise or fall in response to changes in the underlying commodity or related index.
The Strategy is non-diversified, which means that it may invest its assets in a smaller number of issuers than a diversified fund. In addition, the Strategy may invest its assets in particular sectors of the commodities futures market.
The Strategy may invest in high yield securities ("junk bonds") rated below investment grade by Moody's Investors Service, Inc. ("Moody's"), or equivalently rated by Standard & Poor's Ratings Services ("S&P") or Fitch, Inc. ("Fitch"), or, if unrated, determined by PIMCO to be of comparable quality. The Strategy may invest without limitation in securities denominated in foreign currencies and in U.S. dollar-denominated securities of foreign issuers. The Strategy may obtain foreign currency exposure (from non-U.S. dollar-denominated securities or currencies) without limitation. The Strategy may invest without limitation in securities and instruments that are economically tied to emerging market countries. The Strategy may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls). The Strategy may purchase and sell securities on a when-issued, delayed delivery or forward commitment basis and may engage in short sales.
Assets reported are those of the fund.
The TRENDS Managed Futures Strategy is managed by Vineer Bhansali, Managing Director; Matthew Dorsten, Senior Vice President; and Graham Rennison, Senior Vice President.
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The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
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