PIMCO Launches New Target Date Funds
NEWPORT BEACH, CA, April 2, 2008 -- With the U.S. retirement system undergoing fundamental changes, individuals increasingly face the task of asset allocation in their retirement portfolios. PIMCO, a leading investment management firm and provider of retirement solutions, announced today that it is launching PIMCO RealRetirement™ Funds, a series of funds that are intended to help retirees stay ahead of inflation by maximizing their purchasing power.
PIMCO RealRetirement™ Funds are "target date" funds, which automatically rebalance portfolios as they move toward the investor's expected retirement date. These funds are becoming a key component of most defined contribution (DC) plans, such as 401ks, because they give investors the option to have their asset allocation professionally managed.
"Unlike many of the target date products in the market today, PIMCO's retirement solutions focus on facilitating adequate retirement purchasing power, which is the primary success factor of many plan sponsors," said Stacy Schaus, senior vice president and PIMCO's Defined Contribution Practice Leader. "An additional important element to PIMCO's approach is reducing volatility by incorporating a broader range of asset classes, especially as the fund moves closer to its target date."
PIMCO's retirement solutions differ from many older and less diversified types of target date funds, which have been highly concentrated in equities even as they approach the retirement date, when investors are less tolerant to the risk and volatility inherent in many equity strategies. In contrast, PIMCO's RealRetirement™ Funds incorporate real assets -- Treasury Inflation-Protected Securities ("TIPS"), commodities, and real estate -- which seek to help investors grow their wealth while maintaining purchasing power.
Recent weakness in equities, which historically have not reliably out paced inflation and can be volatile, has provided a potent stress test for many equity-focused target date funds, and has highlighted the importance of understanding the differences between investment managers and their respective investment philosophies.
The approach in the PIMCO RealRetirement Funds™ incorporates PIMCO's rigorous risk management strategies as well as a retirement "glide path," PIMCO's allocation process that adjusts the risk profile of the portfolio over time. The glide path approach aims to maximize real return and capital preservation during the accumulation years and to produce reliable income during the retirement years.
The five PIMCO RealRetirement™ Fund are differentiated by target retirement dates for 2010, 2020, 2030, 2040, and 2050. Each fund of funds contains allocations of various PIMCO Funds that include or have exposure to domestic and international securities as well as real assets such as TIPS, real estate and commodities.
Meeting the Objectives of DC Plans and Participants
The PIMCO RealRetirement™ Funds are designed to help defined contribution plan sponsors assist their participants in addressing a number of key issues, including:
- Meeting their retirement income goals,
- Reducing volatility along the way, and
- Protecting them from inflation.
"PIMCO's RealRetirement Funds differ from products in the market today because of our focus on reducing risk, particularly from inflation," Ms. Schaus added. "We believe PIMCO's RealRetirement Funds are attractive for sponsors of defined contribution retirement plans who focus on retirement income replacement."
About PIMCO
With more than $746 billion assets under management, PIMCO is one of the world's leading fund-management companies. Founded in 1971 and based in Newport Beach, California, the company is owned by Allianz Global Investors, a subsidiary of the Munich-based Allianz Group, a leading global insurance company with nearly $1.5 trillion in assets and represented in 70 countries around the globe.
###
Click here for more material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues on 401k plans.
This is a press release provided by the company or its representatives. 401khelpcenter.com, LLC is not the author of this release and is not associated or affiliated with any firm or organization mentioned unless otherwise noted. Use of any information obtained from this release is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.
