PIMCO is listing on 1 May the Global Advantage Inflation-Linked Bond Strategy Fund (Ticker: ILB), which is designed to offer investors the potential for long-term returns above inflation by actively managing global inflation-linked bonds and currencies via the accessible and transparent ETF vehicle.
The fund is managed by Mihir Worah (pictured), managing director and head of PIMCO’s real return portfolio management team.
ILB continues the expansion of PIMCO’s range of actively managed ETFs, which combine PIMCO’s time-tested global investment process and expertise in managing global fixed income with the tradability of an ETF vehicle, providing investors intraday pricing and daily portfolio disclosures in a single share class.
PIMCO believes globalisation exposes investors to price pressures and growth patterns of countries around the world, creating a need for a fuller set of inflation-oriented investments. ILB uses global inflation-linked bonds and currencies to help diversify investors’ inflation protection strategies. Importantly, it will also be actively managed against a gross domestic product (GDP)-weighted benchmark, with the intent to better align investors’ exposure to countries experiencing stronger growth. This is in contrast to traditional market-cap weighted benchmarks, which allocate relative to the inflation-linked bond issuance of each country.
“In this uncertain global economy, some of the key drivers of growth are developing economies, which are often more sensitive to inflationary pressures like commodity prices,” says Worah. “Our forward-looking Global Advantage approach aims to expose investors to the inflation-linked bonds and currencies of these faster-growing economies, potentially resulting in higher real yields than traditional investing using market cap-weighting.”
