PIMCO Real Return Practice

Recognizing that inflation is a key risk factor for asset returns and that often their liabilities are in real (inflation-adjusted) terms, investors are increasingly cognizant of the need for inflation hedges. Investments in “real return” strategies provide an inflation hedge and can also offer important diversification for a portfolio.

PIMCO offers a broad range of real return products to meet investors’ needs:

  • Inflation-linked bond (ILB) strategies – This core real return strategy offers liquidity, low credit risk, and a direct link to inflation. In Europe, PIMCO offers three versions of this strategy:
    • Global Real Return strategy (either global U.S. dollar–denominated, or hedged to major currencies)
    • Euro Real Return strategy
    • U.K. Sterling Inflation-Linked strategy
  • Commodity index strategies – When conservatively managed, this asset class can provide a hedge to inflation “surprises,” and historically has had strong diversification characteristics.
  • All Asset strategies – The UK All Asset strategy employs tactical allocation across a full spectrum of asset classes and feature an explicit real return objective, with a long-term investment objective of UK RPI +4% (RPI = Retail Price Index).