Canadian Total Return Bond Fund

Fund Code: PMO002

Updated 17 July 2018

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  • DAILY NAV (CAD)
    10.83
  • DAILY YTD RETURN
    0.40%
  • TOTAL NET ASSETS (CAD)
    437 MM
    (as of 30-06-2018)
  • TOTAL NET ASSETS (CAD)
    437 MM
    (as of 30-06-2018)
  • CLASS
    Fixed Income
  • Series Inception Date
    20-01-2011
  • CLASS
    Fixed Income
  • Series Inception Date
    20-01-2011

Objective

Seeks maximum total return, consistent with preservation of capital and prudent investment management.

Primary Portfolio

Primarily Canadian dollar Fixed Income instruments of varying maturities

Overview

Fund Overview

The PIMCO Canadian Total Return Bond Fund offers diversification and the possibility of higher investment returns relative to the FTSE TMX Canada Universe Bond Index. It searches for value in every sector of the bond market. Thus, the Fund could be used as a “core” fixed income holding. Investors seeking to balance equity holdings in an aggressive investment portfolio with a lower volatility fixed income option should consider the Total Return Strategy as their fixed income strategy. History has shown that there is a typically low correlation between the equity and fixed income markets. Therefore, employing the Total Return Strategy in combination with an equity portfolio may allow for greater diversification and potentially reduces the risk of swings in the portfolio’s value.

Why Invest in This Fund?

Greater exposure to interest rate trends

The Fund invests in a diversified portfolio of primarily Canadian dollar fixed income instruments of varying maturities, with an average duration that normally varies within two years (plus or minus) of the FTSE TMX Canada Universe Bond Index. Duration is a measure of a security’s price sensitivity to interest rate changes, measured in years; a longer duration implies greater interest rate sensitivity and return potential than intermediate-duration bonds, but also higher volatility. The Fund can be used as a core holding for investors with a higher risk tolerance, or as an allocation to position a portfolio for expected interest rate trends.

Value-added active management

We seek to add value through active management of the Fund. The portfolio offers flexibility to invest across sectors and issuers. Although the Fund is subject to greater interest rate risk than shorter-duration funds, it strives to limit this risk by maintaining the portfolio’s duration within a moderate range around the benchmark’s duration. The Fund employs PIMCO’s total return philosophy, seeking to balance capital appreciation potential and income.

PIMCO Investment Philosophy and Process

The firm’s investment process utilizes both “top-down” and “bottom-up” strategies with the goal of combining perspectives from both the portfolio and security levels in an effort to consistently add value over time within acceptable levels of portfolio risk. In constructing portfolios, the investment management team evaluates the following:

Top-down strategies – which focus on duration, yield curve positioning, volatility and sector rotation. These strategies are driven by our secular outlook of the forces likely to influence the economy and financial markets over the next three to five years, as well as our cyclical views over a six-to-nine month time horizon.

Bottom-up strategies – which drive our security selection process and facilitate the identification and analysis of undervalued securities. Here, we employ advanced proprietary analytics and expertise in all major fixed income sectors.

PRIMARY BENCHMARK

FTSE TMX Canada Universe Bond Index

PRIMARY BENCHMARK DESCRIPTION

FTSE TMX Canada Universe Bond Index is designed to be a broad measure of the Canadian investment-grade fixed income market. Returns are calculated daily, and are weighted by market capitalization, so that the return on a bond influences the return on the index in proportion to the bonds market value. It is intended to be a transparent index, with individual security holdings disclosed electronically each day. The Universe Index is divided into a variety of sub-indexes according to term and credit. The main term subsectors are Short, Mid, and Long. There are four main credit or borrower categories: bonds issued by the Government of Canada (including Crown Corporations), Provincial bonds (including provincially-guaranteed securities), Municipal Bonds, and Corporate Bonds. The Corporate sector is further divided into sub-sectors based on credit rating: a combined AAA/AA sector, a single-A sector, and a BBB sector. It is not possible to invest directly in an unmanaged index.

DISTRIBUTION FREQUENCY

Quarterly

SERIES INCEPTION

20-01-2011

Managers

Ed Devlin

Head of Canadian Portfolio Management

View Profile

Distributions

Historical Prices & Distributions

Latest Distributions ($/Share)1 as of 29-06-2018 (CAD) 0.0441
Distribution (YTD) 2 as of 29-06-2018 (CAD) 0.1077
Yields & Distributions Footnotes & Disclosures

disclosures

1Data does not include special cash dividends.
2Data is based on distributions since the most recent calendar year end and does not include special cash dividends.

Fees & Expenses

Management Fee (%)3 1.00%
Management Expense Ratio (%)4 1.16%

disclosures

3The Annual Management Fee is used to pay for investment management services and general administration of the fund, this fee does not include taxes.
4As of 31/12/2017. Management expense ratio is based on total expenses which includes the Management Fee (excluding commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset value during the period.

Prices & Performance

Daily Statistics

All data as of 17-07-2018

NAV $10.83 One Day Return 0.13%
Daily Change $0.01 Daily YTD Return 0.40%
Click here to view Historical Prices
  • Average Annual Returns
  • Cumulative Returns

All data as of

  • Daily
  • Month End

All data as of

  • Daily
  • Month End

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ​​​​​​​

Calendar Year Returns %

All data as of

Growth of $10,000 (hypothetical)

Morningstar Ratings

Prices & Performance Footnotes & Disclosures

disclosures

A sales communication that includes a rate of return or a mathematical table illustrating the potential effect of a compound rate of return must contain a statement in substantially the following words: “[The rate of return or mathematical table shown] is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of [the investment fund or asset allocation service] or returns on investment [in the investment fund or from the use of the asset allocation service].”

Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective or policies.

A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may adversely affect performance.​

A rating is not a recommendation to buy, sell or hold a fund. © 2018 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Portfolio Composition

All data as of unless otherwise stated

Duration in Years

Effective Duration (yrs) 7.48

Sector Allocation
Duration %

Canada 34.35
Provincial 40.77
Canadian Credit 16.92
Foreign -2.07
ILB 6.90
High Yield Credit 0.70
Emerging Markets 0.57
Canadian Other 1.48
Net Other Short Duration Instruments 0.38
Portfolio Composition Footnotes & Disclosures

disclosures

Duration is a measure of the fund's price sensitivity to changes in interest rates expressed in years.

Portfolio structure is subject to change without notice and may not be representative of current or future allocations.

Effective duration is the duration for a bond with an embedded option when the value is calculated to include the expected change in cash flow caused by the option as interest rates change.

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Disclosures

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. Equities may decline in value due to both real and perceived general market, economic and industry conditions. Derivatives 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. For a complete description of the risks associated with a particular Fund, please refer to the Fund’s prospectus. Sovereign securities are generally backed by the issuing government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks which may be enhanced in emerging markets.  Sovereign securities are generally backed by the issuing government, obligations of the U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value.  Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets.

The products and services provided by PIMCO Canada Corp. may only be available in certain provinces or territories of Canada and only through dealers authorized for that purpose.


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.


The Funds offer different series, which are subject to different fees and expenses (which may affect performance), having different minimum investment requirements and are entitled to different services.


PIMCO Canada has retained PIMCO LLC as a subadvisor. PIMCO Canada remains responsible for any loss that arises out of the failure of its sub-advisor.