Investment Strategies

PIMCO Diversified Multi-Asset Fund (Canada): Winning by Not Losing

An overview of PIMCO’s Diversified Multi-Asset Fund (Canada) – DMAF – a one-stop multi-asset solution for those that want to participate in the upside that equities can offer while mitigating downside risk.

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TEXT ON SCREEN: PIMCO

TEXT ON SCREEN: TITLE - ECONOMIC CYCLE

IMAGE: Under the text “ECONOMIC CYCLE,” a wavey line snakes along from left to right.

Knowing where to invest – and avoiding the pitfalls of buying high and selling low – can be challenging.

TEXT ON SCREEN: DIVERSIFED MULTI-ASSET FUND (CANADA)

IMAGE: Text is centered on screen, with an animated wavy line snaking through the graphics. The first letters of each word are highlighted in green, spelling DMAF.

We think everyone should have the option to invest with confidence at any time, and remain invested for the long-run and this philosophy has shaped PIMCO’s Multi-Asset Fund, known as DMAF.

TEXT ON SCREEN: D M A F

IMAGE: Text is centered, and is underlined. Beneath each letter is an icon: a square underneath the letter “D,” a diamond under “M,” a circle under “A,” and a hexagon under “F.”

DMAF is a one-stop multi-asset solution for those that want BOTH to participate in the upside that equites can offer, with downside awareness,

TEXT ON SCREEN: UPSIDE AWARENESS

IMAGE: The four icons—a square, diamond, circle and hexagon—rise up from a horizontal line in a circle that appears, towards the top. The text “Upside Awareness” appears to the right of the circle, with an upward pointing arrow next to it.

TEXT ON SCREEN: DOWNSIDE AWARENESS

IMAGE: The four icons—a square, diamond, circle and hexagon—drop down from a horizontal line in the circle, and fall to the bottom. The text “Downside Awareness” appears to the left of the circle, with a downward pointing arrow next to it.

DMAF applies PIMCO’s macro views across global liquid markets in a dynamic way.

IMAGE: An abstract, illustrated map of the world appears, made up of plus signs. A magnifying glass scrolls over the continents, giving a close-up of the plus signs.

As we are not wedded to a benchmark, we have flexibility and can seize opportunities across different economic cycles and market environments.

TEXT ON SCREEN: BENCHMARK

IMAGE: Four icons float across the screen from left to right, with a square leading the group, absorbing smaller dots along the way. The square is followed by a circle, diamond and hexagon.

It’s managed like a traffic light system:

TEXT ON SCREEN: TRAFFIC LIGHT SYSTEM

IMAGE: A traffic light appears in the middle of the screen.

The degree of risk we take depends on our economic outlook, asset valuation, and market technicals.

IMAGE: A pie chart includes three equal parts, divided into “economic outlook” on the upper right and in dark blue, “asset valuation” on the bottom center and in gray, and “market technicals” on the upper left, shaded in blue.

Put simply, if our outlook is positive: the economic cycle is improving, valuations are attractive and technicals are supportive

TEXT ON SCREEN: SUBTITLE – EQUITIES

IMAGE: A semi-circle dial, oriented like the top half of a clockface, is in the center, with a needle pointing two-thirds away from the top of the dial, at around two o’clock. A region between 12 and 2 is shaded in a spectrum of colors, graduated from orange to green. The dial is labeled “Equities” underneath. Also beneath the label, there are three horizontally oriented scales presenting economic outlook, valuations, and technicals. Each scale shows a region showing a similar graduated scale of colors, from orange to green. For each, a downward arrow is on the far right of the colored region, pointing down at the green area. On the very top of the screen, there are three white circles, with the one on the far-right turning green.

we raise our exposure to equity markets where signals are more mixed: in a slowing or late stage economic cycle, our risk and equity exposure is adjusted to medium

TEXT ON SCREEN: SUBTITLE – EQUITIES

IMAGE: A semi-circle dial, oriented like the top half of a clockface, is in the center, with a needle pointing towards the center, at around noon, with the region shaded in a spectrum of colors, graduated from red to orange. The dial is labeled “Equities” underneath. Beneath the label, there are three horizontally oriented scales presenting economic outlook, valuations, and technicals. Each scale shows a region showing a similar graduated scale of colors, from red to orange. For each, a downward arrow is on the far left of the colored region, pointing down at the red area. On the very top of the screen, there are three white circles, with the one in the center turning orange.

but we reduce our exposure to equities when there are recession concerns.

TEXT ON SCREEN: SUBTITLE – EQUITIES

IMAGE: A semi-circle dial, oriented like the top half of a clockface, is in the center, with a needle pointing towards the left, at around 10 o’clock. A region between 10 and 12 is shaded in a spectrum of colors, graduated from red to orange. The dial is labeled “Equities” underneath. Also beneath the label, there are three horizontally oriented scales presenting economic outlook, valuations, and technicals. Each scale shows a region showing a similar graduated scale of colors, from red to orange. For each, a downward arrow is on the far left of the colored region, pointing down at the red area. On the very top of the screen, there are three white circles, with the one on the left turning red.

DMAF offers exposure to a number of asset classes including equities, credit, government bonds and currencies.

TEXT ON SCREEN: TITLE – DMAF; SUBTITLE – ASSET CLASSES

IMAGE: Four icons are arranged left to right underneath a bracket labeled “asset classes.” A green square represents “equity,” a diamond stands for “credit,” a circle represents “government bonds,” and a hexagon is for “currencies.”

It invests globally, mainly in developed markets but we won’t shy away from exposure to emerging markets when opportunities arise.

IMAGE: An abstract, illustrated map of the world appears, made up of plus signs. The plus signs are white on a blue background, with a few exceptions, where some of the pluses in emerging market countries are colored yellow, and some in the developed regions are green.

DMAF helps investors stay invested through the cycle.  PIMCO does this by using innovative trading techniques to take positions for the portfolio.

TEXT ON SCREEN: PIMCO

TEXT ON SCREEN: TITLE – INNOVATIVE

IMAGE: Four icons float above and below the text “INNOVATIVE.”

You can imagine a scenario where we see opportunity in Japanese equities. We’d take the approach of combining a long call position with a short-put allowing us to capture, for example, 70% of the upside if prices rise 10%, but only 20% of the downside if prices decline 10%.

TEXT ON SCREEN: TITLE – JAPANESE EQUITIES

IMAGE: A horizontal line is divided by a white vertical dash, just right of center, which represents price of the stock. To its right, an upward sloping, green triangular region represents the potential 70% of the upside of using a long call if the stock price were to rise 10%. To the left of center, a marker appears, indicating the strike price of a short put.

TEXT ON SCREEN: JAPANESE EQUITIES

IMAGE: After the short put marker is added, a small orange triangle appears to show the effect of a 10% drop in the stock price, which would amount to a 20% loss. The triangle representing this area is much smaller than that of the long call’s gain of 70% for a 10% increase in the stock price, shown on the right.

This is a perfect example to represent

TEXT ON SCREEN: DIVERSIFIED MULTI-ASSET FUND (CANADA)

our philosophy – winning by not losing.

TEXT ON SCREEN: TITLE – DMAF; SUBTITLE – WINNING BY NOT LOSING

DMAF, like all investments has potential risks

TEXT ON SCREEN: TITLE- WHAT ARE THE RISKS?

IMAGE: Four risks are listed with descriptions, and include commodities risk, credit and default risk, currency risk, and derivatives and counterparty risk.

that could impact investment outcomes. It’s important that investors are aware of these potential risks when deciding to invest in the strategy.

TEXT ON SCREEN: TITLE- WHAT ARE THE RISKS?

IMAGE: Four risks are listed with descriptions, and include emerging markets risk, equity risk, interest rate risk and liquidity risk. 

TEXT ON SCREEN: PIMCO; FOR ANY QUESTIONS, PLEASE GO TO PIMCO.CA/DMAF OR CONTACT YOUR ADVISOR

No offering is being made by this material. Interested investors should obtain a copy of the prospectus, which is available from your Financial Advisor.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Disclosure


IMPORTANT NOTICE

Please note that this video contains the opinions of the manager as of the date recorded, and may not have been updated to reflect real time market developments. All opinions are subject to change without notice.

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 low interest rate environments increase this risk. 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. 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. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. 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. Diversification does not ensure against loss.

Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. 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. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2021, PIMCO

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. PIMCO Canada has retained PIMCO LLC as sub-adviser. PIMCO Canada will remain responsible for any loss that arises out of the failure of its sub-adviser.

PIMCO Canada Corp. 199 Bay Street, Suite 2050, Commerce Court Station, P.O. Box 363, Toronto, ON, M5L 1G2, 416-368-3350

CMR2021-0804-1745267

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