Liquid Alternatives: Considerations for Portfolio Implementation
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1 In Depth September 215 Your Global Investment Authority Liquid Alternatives: Considerations for Portfolio Implementation Justin Blesy Vice President Product Manager Ashish Tiwari Executive Vice President Product Manager Since the financial crisis, investors have poured nearly half a trillion dollars into liquid alternative strategies typically mutual funds and ETFs that deploy nontraditional strategies once reserved for large institutional investors. i These vehicles offer the potential for diversification, downside risk mitigation and attractive risk-adjusted returns with the transparency and daily liquidity many investors desire. Liquid alternatives have been a democratizing force for investors, and we believe today s market environment arguably has only made them more attractive. Yet implementing liquid alternatives in portfolios presents a complex set of challenges as risk, return and fee profiles vary widely across strategies. In the pages that follow, we present an overview of liquid alternative strategies and considerations for their implementation in portfolios.
2 Liquid alternatives: A search for returns and diversification Typically packaged as mutual funds or ETFs, liquid alternatives bring many nontraditional investment strategies once reserved for large institutional investors to a broader investor base. Assets in U.S. liquid alternative strategies have jumped from less than $1 billion in 28 to more than $5 billion at the end of 214, ii with potential for continued growth ahead. Their popularity reflects the turbulence many investors endured with traditional stock and bond portfolios in recent decades, as well as muted forward-looking return expectations for these asset classes. The experiences of the past two decades left many investors searching for additional sources of return and diversification. They learned, often the hard way, that the majority of their portfolio s return and risk had been driven by equities, an asset class prone to significant drawdowns. Although a traditional 6/4 portfolio has a 6% capital allocation to equities, risk is driven almost entirely by equities given that equities are much more volatile than bonds. While this can lead to strong performance during equity bull markets, as has been the case in the U.S. since 29, it can also leave portfolios exposed to severe drawdowns (see Figure 1). PIMCO has been managing liquid alternative investments for well over a decade and, according to Morningstar data, is the largest manager of liquid alternative mutual funds in the U.S. ii At the same time, unstable correlations across many assets have left investors with fewer reliable portfolio diversifiers. For example, the sharp increase in the correlation of stocks and bonds during 213 s Taper Tantrum left many investors concerned about the ability of fixed income allocations to diversify their portfolio s equity risk. These significant market drawdowns over the past 15 years have resulted in much lower returns than investors experienced in the 198s and 199s. During those decades, a traditional 6/4 portfolio had an average annualized return of 13.7% over rolling five-year periods. In contrast, since 2, investors received on average 5.9% and forward-looking expectations are even lower given today s starting conditions (see Figure 2). As of 3 June 215, 1-year U.S. Treasury yields of 2.4% were near historical lows, and in stocks, the S&P 5 dividend yield FIGURE 1: THE TURBULENT RIDE OF TRADITIONAL STOCK AND BOND PORTFOLIOS SINCE Traditional 6/4 portfolio Other Fixed income Equities 12 Rolling 12-month drawdowns Traditional 6/4 portfolio Market value (%) Volatility (%) Percent (%) Capital allocation Risk allocation Charts are provided for illustrative purposes and are not indicative of the past or future performance of any PIMCO product. The traditional 6/4 portfolio is represented by 6% S&P 5 Index and 4% Barclays U.S. Aggregate Index. 2 SEPTEMBER 215 IN DEPTH
3 was 2.1% with cyclically-adjusted P/E ratios near all-time highs. This stands in stark contrast to the conditions that preceded the strong bull market in stocks and bonds in the 198s and 199s, when1-year Treasuries peaked near 16%, dividend yields approached 6% and cyclically-adjusted P/E ratios were near all-time lows. Today s environment of lower yields, higher valuations and slower global growth has led to modest longterm return expectations for stocks of 4.5% and for core bonds of 2.5%, according to PIMCO s latest capital market projections as of June 215. Against this backdrop, liquid alternatives hold out the prospect of alternative sources of return and portfolio diversification, which has in part fueled their growth. FIGURE 2: SINCE 2, RETURNS FROM TRADITIONAL PORTFOLIOS HAVE FALLEN, WITH PROJECTIONS FOR MUTED FORWARD-LOOKING RETURNS Percent (%) year rolling returns Traditional 6/4 portfolio 25th percentile 75th percentile Average % % U.S. stocks Core U.S. bonds 6/4 portfolio Charts are provided for illustrative purposes and are not indicative of the past or future performance of any PIMCO product. The traditional 6/4 portfolio is represented by 6% S&P 5 Index and 4% Barclays U.S. Aggregate Index. Data on right-hand chart is as of 3 June 215. Percent (%) PIMCO s 1-year capital market assumptions Fund launches and assets under management (AUM) on the rise The current investment environment has made liquid alternatives one of the fastest-growing categories in the investment world. Since 28, the number of funds in the U.S. has tripled to more than 7, and AUM has quintupled to $5 billion with the number of firms managing these funds reaching nearly 3 iii. However, the proliferation of strategies presents its own challenges. Researching liquid alternative strategies can sometimes raise more questions than answers for investors, including the basic question, What is a liquid alternative? Additionally, short track records and broad flexibility of many liquid alternative strategies make it difficult to understand underlying risk and return characteristics, complicating portfolio construction. FIGURE 3: LIQUID ALTERNATIVES COME TO MAIN STREET AUM (billions) $ AUM Growth Currency Bear market Real estate-linked Commodity Multi-alternative Managed futures Equity market-neutral Long/short equity bond Source: Morningstar, U.S. data, as of 31 December 214 IN DEPTH SEPTEMBER 215 3
4 Defining liquid alternatives Amid the multitude of strategies, defining liquid alternatives precisely isn t simple. At PIMCO, we take a broad view: We define liquid alternatives as investments that exhibit modest to low correlation with traditional stock and bond investments and are accessible in broadly available investment vehicles that are without the principal lock-ups of traditional private equity funds and hedge funds. The term liquid therefore refers to the vehicle, not the underlying investment (which may or may not be liquid). We further divide liquid alternatives into two major categories: alternative asset classes and alternative investment strategies. In both cases these investments tend to exhibit modest to low correlations with traditional stocks and bonds, but alternative asset classes and alternative investment strategies can be effective diversifiers for distinctly different reasons. Alternative asset classes, such as commodities and emerging market currencies, provide exposure to alternative risk premia whose returns are driven by different economic drivers than traditional portfolios. Alternative investment strategies, on the other hand, are typically actively managed and not constrained by traditional benchmarks. These strategies may provide diversification through the manager s individual security selection (or active management alpha), with much less reliance on broad stock and bond exposures to deliver returns. Examples of alternative strategies include absolute return fixed income, equity long/short and managed futures (see Figure 4). FIGURE 4: THE LIQUID ALTERNATIVES LANDSCAPE Liquid Alternatives Traditional portfolios Alternative asset classes Alternative investment strategies Traditional stock and bond strategies Investments where primary drivers of risk/return are different than long stock or bond beta Actively managed strategies that include a higher degree of manager discretion and a broader tool kit in an effort to enhance returns and/or diversify risk Categories Active management risk Source of risk exposure Currency Bear market Real estate-linked Commodity Categories Multi-alternative Managed futures Equity market-neutral Long/short equity bond Alternative risk factors Stock and bond risk Source: PIMCO Charts are provided for illustrative purposes and are not indicative of the past or future performance of any PIMCO product. 4 SEPTEMBER 215 IN DEPTH
5 Liquid alternatives: Portfolio considerations Understanding risk characteristics The varied risk characteristics of liquid alternatives which reflect an array of asset classes, strategies and manager styles can complicate the process of incorporating them into portfolios. Long/short equity managers, for instance, typically have a positive equity beta (they are normally net long equities), whereas equity market-neutral strategies target zero equity beta. Other categories, such as managed futures, may have more dynamic equity beta; equity beta may be positive in strong bull markets and negative during sustained market sell-offs. Implementing liquid alternatives in portfolios, therefore, requires understanding not only the different categories of strategies but, perhaps more importantly, comprehending how their key risk characteristics vary across different market environments. In many ways, it is easier to grasp the risk profile of alternative asset classes, such as real estate investment trusts (REITs), commodities and currencies, since investment products in these categories often share similar benchmarks. While the benchmarks themselves often represent nontraditional sources of risk, investors have a better understanding of the risks they are taking. However, there is a much greater challenge across most alternative investment strategy categories, as risks can vary dramatically even within the same category. Many of these strategies are often benchmarked to cash or LIBOR, providing little anchor for the risks in the underlying strategies. For example, a review of the top 1 managers by AUM in the nontraditional bond category reveals significant differences in total volatility and the risk contributions from credit and duration (see Figure 5). Multiple factors can drive these discrepancies, including differences in investment processes, breadth of opportunity set, investment outlook and product structure. FIGURE 5: RISKS ARE OFTEN IDIOSYNCRATIC 6 Full sample risk decomposition 5 Realized Volatility (%) A B C D E F G H I J Residual EM FX DM FX EM Sov spread HY spread IG spread U.S. MBS spread U.S. Muni spread JP duration EUR duration 1-3 slope 2-1 slope U.S. duration Source: Bloomberg and PIMCO calculations as of 3 June 215. Based on U.S. data. Charts are provided for illustrative purposes and are not indicative of the past or future performance of any PIMCO product. IN DEPTH SEPTEMBER 215 5
6 Alternative Asset Class Strategies Bear market strategies are structured to provide attractive beta-hedging (or outright short) exposure. Commodity and real estate-linked strategies are tied to the performance of real assets, such as commodities and real estate. Currency strategies are designed to provide structural exposure to foreign currencies, in both developed and emerging markets, based on macroeconomic views and valuation analyses. Alternative Investment Strategies Equity market-neutral strategies seek to provide limited equity beta by taking equal long and short positions, thereby isolating the alpha component of an equity strategy. Long/short equity strategies are designed to provide variable equity exposure while allowing for broader management of market risk and/or the ability to benefit from short exposure with improved downside risk mitigation. Multi-alternative strategies seek attractive risk-adjusted returns with modest volatility and limited downside potential by allocating across a broad range of absolute-returnoriented strategies. Managed futures strategies seek to generate positive returns by capturing price trends across major asset classes and have historically provided diversification to a traditional portfolio of stocks and bonds, especially during times of market stress. bond strategies seek positive returns across all market environments by investing across global fixed income markets, often using a broad range of instruments; results are achieved through a combination of active management and trading expertise. Therefore, we believe investors contemplating adding liquid alternatives to their portfolios should have a solid grasp of the following: Total volatility and mix of risk, particularly correlations to traditional portfolio risks equity risk and interest rate risk Historical drawdowns and drawdown potential and how they compare with expectations Level and use of leverage and options to identify potential hidden risks Performance across different market environments Considerations for manager selection Much as with traditional hedge fund and private equity fund investments, manager selection is crucial to the success of a liquid alternative investment. As a manager s discretion increases, so too does the potential for over (and under) performance. Figure 6 shows the range of outcomes by category over the five years ending 3 June 215. Not surprisingly, more traditional investments provided relatively consistent results across managers while alternative investments had a much wider band. Whether offered as private or public strategies, many alternative strategies are inherently more dependent on portfolio manager expertise a larger component of returns may derive from active manager decisions, not market returns. However, given short track records across many funds and the large number of options, manager selection can prove challenging. On the next page, we outline a suggested checklist for reviewing a manager s potential to generate attractive risk-adjusted returns. 6 SEPTEMBER 215 IN DEPTH
7 FIGURE 6: IN ALTERNATIVE STRATEGIES, MANAGER SKILL PLAYS A BIGGER ROLE Return (%) Return dispersion: difference in returns between 2th and 8th percentile managers by category Fixed income Equities Intermediateterm bond bond Fixed income relative value Large blend Long/short equity (liquid alts) Long/short equity (hedge fund) Traditional investments Liquid alternatives Hedge funds Note: Data is for 3 June 21 to 3 June 215. Source: Morningstar, Eurekahedge and PIMCO calculations as of 3 June 215. Based on U.S. data. Charts are provided for illustrative purposes and are not indicative of the past or future performance of any PIMCO product. Key attributes for liquid alternative managers: Exceptional and proven manager experience Returns generated in a consistent and diversified manner Strong performance during periods of market shocks A well-defined and repeatable investment process Depth of research and a demonstrated ability and process to convert research themes into profitable trades Understanding of the underlying risk factors and the ability to dynamically adjust such exposures within the portfolio as warranted Trading efficiency, often achievable through economies of scale A robust risk management framework Proper alignment with investor incentives Ability to clearly communicate strategies, objectives and risks to investors Regulatory/compliance processes and experience in managing mutual funds and ETFs IN DEPTH SEPTEMBER 215 7
8 Fee variance Fees, of course, are another important consideration, and they also vary widely across liquid alternative strategies. Part of this variance is driven by the structure of the investment product. For example, some managers aggregate third-party strategies, passing through underlying fees to end investors. In contrast, other structures that focus on individual securities may offer lower fees. When investing in alternatives, higher fees may be justified by the additional return potential offered but not always. It is therefore important to evaluate a manager s fee in relation to the value generated (see Figure 7). FIGURE 7: TOTAL FEES AND EXPENSES RANGE WIDELY Credit relative value* Equity market-neutral Long/short equity Managed futures Multi-strategy th Percentile Median 9th Percentile Source: Lipper and PIMCO calculations as of 3 June 215. Based on U.S. data. *Credit relative value is a subset of nontraditional bond. Fee structures for other investment products and jurisdictions may vary. An investor should thoroughly review offering documents prior to making an investment decision. 8 SEPTEMBER 215 IN DEPTH
9 Implementing liquid alternatives Incorporating liquid alternative strategies in portfolios has the potential to expand the opportunity set and increase the chance of successful outcomes. Depending on an investor s objectives and tolerance for risk, liquid alternative strategies can play a variety of roles in a portfolio and are commonly implemented in the following ways: Dedicated liquid alternatives allocation Dedicating a portion of total assets to liquid alternative strategies has the potential to improve risk-adjusted returns, improve diversification and address tactical market views and concerns. Importantly, as successful as various liquid alternatives may be, their impact on an overall portfolio depends on the size of their allocation relative to traditional stock and bond allocations. Allocations as small as 5% are unlikely to significantly increase return potential or reduce downside risk. As such, investors may wish to consider increasing their overall dedicated alternatives allocation, as many institutional investors have already done often between 1% and 3% and sometimes higher depending on investment objectives (see Figure 8). Careful thought should also be given to the mix of strategies included in a dedicated liquid alternatives allocation. Ideally, strategies should complement each other and provide diversification to the overall portfolio. For example, an alternatives allocation with signficant exposure to multiple long/short equity strategies may serve to amplify, rather than diversify, a portfolio s equity risk relative to other liquid alternative strategies. Careful analysis of the underlying strategies risks will help to ensure sufficient diversification. FIGURE 8: DEDICATED LIQUID ALTERNATIVES ALLOCATION Core stocks Core bonds Cash Source: PIMCO Liquid alternatives Core complement The constrained, relative-return framework of traditional long-only strategies can limit a portfolio manager s ability to mitigate risk and add value. As a result, many investors are complementing their core benchmark-oriented strategies with absolute return-oriented approaches that allow for greater manager flexibility and a broader opportunity set relative to traditional approaches (see Figure 9). For example, within fixed income, investors could pair traditional benchmark-oriented core bond allocations with unconstrained allocations; within equities, they could add long/short strategies to complement long-only equity strategies. Importantly, liquid alternatives may provide an element of tactical repositioning based on current market information that is lacking from diversified but static asset allocation models. However, absolute return portfolios may not necessarily fully participate in strong, positive market rallies. FIGURE 9: CORE COMPLEMENT Liquid alternative complement Core Traditional stock and bond exposure Source: PIMCO IN DEPTH SEPTEMBER 215 9
10 Contrasting liquid alternative strategies with hedge fund and private equity investments Initially, hedge funds and private equity funds were the primary way investors accessed alternative investments. Neither was widely available beyond institutional or accredited individual investors, in part, because both typically required large minimum initial investments and lengthy lock-ups and offered little transparency. Relative to these semiliquid and illiquid alternatives, liquid alternatives may provide a number of benefits, including: Lower investment minimums Daily liquidity in most vehicles Improved transparency For U.S. investors, simplified tax reporting (typically a 199, not a K-1) However, there are trade-offs. Not all traditional hedge fund and private equity strategies can be responsibly offered in a liquid alternatives vehicle. Many require capital lock-ups to align the liquidity provided to clients with the horizon of the fund s investments. Often, this embedded illiquidity premium can offer the potential for more attractive returns than can be achieved in liquid strategies, and in a world of lower-return prospects, this higher return potential may be an attractive benefit of hedge fund and private equity strategies. It is important to note, though, that several strategy types, including managed futures and equity long/short strategies, increasingly can be implemented in liquid vehicles without a significant reduction in return potential, whereas private real estate, infrastructure and private equity strategies may necessitate reduced liquidity to achieve investment objectives (see Figure 1). FIGURE 1: COMPARING THE BENEFITS Liquid alternative strategies can provide many of the same advantages as private fund alternatives. They offer low correlation and the potential for higher excess returns than traditional 6/4 portfolios with the same transparency, accessibility and ease of transaction. Potential diversification benefits vs. traditional 6/4 portfolio Traditional 6/4 portfolio* Liquid (public fund) alternatives* Private fund alternatives None Moderate/high Moderate/high Daily liquidity (most vehicles) Yes Yes No Typical attributes Transparency High High Moderate Accessibility Broad Broad Accredited investors only Tax reporting (U.S. investors) Typically 199 Typically 199 Typically K-1 Source: PIMCO Long/short flexibility None/limited Yes Yes Potential capture of illiquidity premium Low Low High Potential capture of nontraditional betas Low High High * Benefits limited to when implementing in an investment product offering the underlying characteristics. An investor should thoroughly review offering documents prior to making an investment decision. 1 SEPTEMBER 215 IN DEPTH
11 Proceed with caution, but do proceed Over the coming years, growing numbers of investors will likely be adding liquid alternative strategies to their portfolios. Amid an environment of lower yields, higher valuations and slower global growth, liquid alternatives can be an important addition to investor portfolios, offering the potential to enhance returns and better manage risk. Indeed these strategies have seen tremendous growth since the financial crisis with a proliferation in the number of strategies and significant growth in assets. However, as discussed, investors should be aware of several key considerations before investing, notably how risk and return drivers vary significantly across liquid alternative strategies. Understanding how these factors may affect a strategy s performance across different market environments holds the key to successfully incorporating liquid alternatives into investor portfolios. IN DEPTH SEPTEMBER
12 i PIMCO s liquid alternative strategies are without the principal lock-ups of traditional private equity funds and hedge funds and include separate accounts whose holdings can be liquidated at a client s request subject to current market conditions, mutual funds that can be liquidated at NAV on a daily basis and ETFs that can be liquidated on the secondary market under normal market conditions. There is no guarantee that a security will be able to be liquidated in a timely fashion or when it would be most advantageous to do so. ii As of 3 June 215, Morningstar Direct. Based on Morningstar s alternative mutual fund categories and assets under management. iii Morningstar data as of 3 June 215. Liquid alternatives are limited to certain investment vehicles organized in certain jurisdictions; not all investment vehicles may be available to all investors in all jurisdictions. All investments contain risk and may lose value. Alternative investment strategies are often subject to greater risk than traditional investments. Diversification does not ensure against loss. Risk Factor Modeling: PIMCO has historically used factor-based stress analyses that estimate portfolio return sensitivity to various risk factors. Essentially, portfolios are decomposed into different risk factors and shocks are applied to those factors to estimate portfolio responses. Because of limitations of these modeling techniques, we make no representation that use of these models will actually reflect future results, or that any investment actually will achieve results similar to those shown. Hypothetical or simulated performance modeling techniques have inherent limitations. These techniques do not predict future actual performance and are limited by assumptions that future market events will behave similarly to historical time periods or theoretical models. Future events very often occur to causal relationships not anticipated by such models, and it should be expected that sharp differences will often occur between the results of these models and actual investment results. Stress testing involves asset or portfolio modeling techniques that attempt to simulate possible performance outcomes using historical data and/or hypothetical performance modeling events. These methodologies can include, among other things, use of historical data modeling, various factor or market change assumptions, different valuation models and subjective judgments. Barclays U.S. Aggregate Index represents securities that are SEC-registered taxable and dollar denominated. The index 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. These major sectors are subdivided into more specific indexes that are calculated and reported on a regular basis. The S&P 5 Index is an unmanaged market index generally considered representative of the stock market as a whole. The index focuses on the Large-Cap segment of the U.S. equities market. It is not possible to invest directly in an unmanaged index. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material is distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. PIMCO provides services only to qualified institutions and investors. This is not an offer to any person in any jurisdiction where unlawful or unauthorized. Pacific Investment Management Company LLC, 65 Newport Center Drive, Newport Beach, CA 9266 is regulated by the United States Securities and Exchange Commission. PIMCO Europe Ltd (Company No ), PIMCO Europe, Ltd Amsterdam Branch (Company No ), and PIMCO Europe Ltd - Italy (Company No ) are authorised and regulated by the Financial Conduct Authority (25 The North Colonnade, Canary Wharf, London E14 5HS) in the U.K. The Amsterdam and Italy branches are additionally regulated by the AFM and CONSOB in accordance with Article 27 of the Italian Consolidated Financial Act, respectively. PIMCO Europe Ltd services and products are available only to professional clients as defined in the Financial Conduct Authority s Handbook and are not available to individual investors, who should not rely on this communication. PIMCO Deutschland GmbH (Company No , Seidlstr a, 8335 Munich, Germany) is authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) (Marie-Curie-Str , 6439 Frankfurt am Main) in Germany in accordance with Section 32 of the German Banking Act (KWG). The services and products provided by PIMCO Deutschland GmbH are available only to professional clients as defined in Section 31a para. 2 German Securities Trading Act (WpHG). They are not available to individual investors, who should not rely on this communication. PIMCO (Schweiz) GmbH (registered in Switzerland, Company No. CH ), Brandschenkestrasse 41, 82 Zurich, Switzerland, Tel: The services and products provided by PIMCO Switzerland GmbH are not available to individual investors, who should not rely on this communication but contact their financial adviser. PIMCO Asia Pte Ltd (51 Orchard Road #9-3, Wheelock Place, Singapore 23888, Registration No K) is regulated by the Monetary Authority of Singapore as a holder of a capital markets services licence and an exempt financial adviser. The asset management services and investment products are not available to persons where provision of such services and products is unauthorised. PIMCO Asia Limited (Suite 221, 22nd Floor, Two International Finance Centre, No. 8 Finance Street, Central, Hong Kong) is licensed by the Securities and Futures Commission for Types 1, 4 and 9 regulated activities under the Securities and Futures Ordinance. The asset management services and investment products are not available to persons where provision of such services and products is unauthorised. PIMCO Australia Pty Ltd ABN , AFSL (PIMCO Australia) offers products and services to both wholesale and retail clients as defined in the Corporations Act 21 (limited to general financial product advice in the case of retail clients). This communication is provided for general information only without taking into account the objectives, financial situation or needs of any particular investors. PIMCO Japan Ltd (Toranomon Towers Office 18F, , Toranomon, Minato-ku, Tokyo, Japan 15-1) Financial Instruments Business Registration Number is Director of Kanto Local Finance Bureau (Financial Instruments Firm) No PIMCO Japan Ltd is a member of Japan Investment Advisers Association and The Investment Trusts Association, Japan. Investment management products and services offered by PIMCO Japan Ltd are offered only to persons within its respective jurisdiction, and are not available to persons where provision of such products or services is unauthorized. Valuations of assets will fluctuate based upon prices of securities and values of derivative transactions in the portfolio, market conditions, interest rates and credit risk, among others. Investments in foreign currency denominated assets will be affected by foreign exchange rates. There is no guarantee that the principal amount of the investment will be preserved, or that a certain return will be realized; the investment could suffer a loss. All profits and losses incur to the investor. The amounts, maximum amounts and calculation methodologies of each type of fee and expense and their total amounts will vary depending on the investment strategy, the status of investment performance, period of management and outstanding balance of assets and thus such fees and expenses cannot be set forth herein. PIMCO Canada Corp. (199 Bay Street, Suite 25, Commerce Court Station, P.O. Box 363, Toronto, ON, M5L 1G2) services and products may only be available in certain provinces or territories of Canada and only through dealers authorized for that purpose. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO and YOUR GLOBAL INVESTMENT AUTHORITY are trademarks or registered trademarks of Allianz Asset Management of America L.P. and Pacific Investment Management Company LLC, respectively, in the United States and throughout the world. 215 PIMCO Newport Beach Headquarters 65 Newport Center Drive Newport Beach, CA Amsterdam Hong Kong London Milan Munich New York Rio de Janeiro Singapore Sydney Tokyo Toronto Zurich pimco.com CMR PWP5_ GBL
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