Low Duration Strategy Overview

An overview of PIMCO’s Low Duration strategy, which extends duration beyond traditional money market and short-term vehicles to seek excess relative returns, with modest additional risk.

What is Low Duration?

PIMCO’s Low Duration strategy seeks maximum total return, consistent with preservation of capital and prudent investment management. The strategy aims to produce low volatility of returns and minimal credit risk without sacrificing liquidity. Low duration strategies invest within a diversified range of fixed income securities while maintaining average portfolio duration of one to three years under most market conditions. The strategy extends duration beyond traditional money market and short-term vehicles to develop a greater opportunity set from which to invest, thus potentially generating excess relative returns. The Low Duration strategy focuses on the higher yielding sectors while attempting to maximize expected total return. PIMCO’s analytical capabilities assist in the selection of these securities.


Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and while generally supported by a government, government-agency or private guarantor there is no assurance that the guarantor will meet its obligations. PIMCO strategies utilize derivatives which 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. The credit quality of a particular security or group of securities does not ensure the stability or safety of the overall portfolio. There is no guarantee that this investment strategy will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest for a long-term especially during periods of downturn in the market. Diversification does not ensure against loss. Investors should consult their investment professional prior to making an investment decision.

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.