PIMCO Mutual Funds

If you are not familiar with the way mutual funds work, it would be good advice to study the mechanism in general and then focus in on what PIMCO mutual funds could offer you. You will find that investing in mutual funds is even more straightforward than buying common stocks. A mutual fund is created by a mutual fund manager and you have an opportunity to acquire a share of this portfolio. The positive aspect is that you can closely track performance not only of mutual funds that interest you but also of the past performance track record of the mutual fund manager you are considering partnering with.

When you do your research, you will find that PIMCO mutual funds have grown considerably since 1971 when the Pacific Investment Management Company (PIMCO) started with an original portfolio worth $12 million. By the last quarter of 2008, their mutual fund value stood at an asset value of $829 billion. This shows a solid growth performance over the 37 years of trading.

The advantage of mutual funds over individual company stock investments is quite clear. An individual stock can rise or fall dramatically in value given market conditions, or based on the company performance. Mutual funds on the other hand are a basket of investments and therefore the logic is that the risk is spread out, thereby reducing the chance of loss of value. When examining mutual funds available, you can decide whether to go for higher risk, potentially higher returns or a more conservative mutual fund investment that carries greater security.

PIMCO fund portfolio
PIMCO mutual funds are particularly attractive for institutional investor money managers as they deliver higher returns but at the same time requiring larger investments. It does not mean that individual investors should assume that they cannot access these mutual funds, but rather that it would be necessary, in some cases for the individual investor to group up with other investors to meet the minimum investment requirements. It makes sense to make this extra effort because PIMCO mutual funds have a strong track record performance.

As the minimum investment into a PIMCO mutual fund is $5 million, the majority of individual investors will not have had any experience with these funds. PIMCO has made it easier for individual investors to invest in their funds by offering plans such as 401k that allow the investor to take part with a team of similar investors in a structured way.

PIMCO cost performance and returns
Morningstar, the respected monitor of stock and mutual funds, has indicated that the expense ratio for PIMCO mutual funds range from below average for international stock funds to average for the taxable bond fund. PIMCO is mainly focused on taxable bond assets followed by stock funds in the domestic market.

It’s important to understand the difference between no-load funds and funds with load when deciding how to invest. A no-load mutual fund is sold without any sales charges or commissions; therefore all of your investment can be used in the mutual fund of your choice. Mutual funds with load carry commissions and management fees, so investment advisors argue that these funds should be taken more seriously as the price of entry is higher. This argument could be valid but it is important that you bear in mind that the broker who offers this advice is likely to benefit from a sales commission too, therefore his or her advice should not be considered impartial.

The best rated PIMCO mutual funds
PIMCO bond funds are their best rated mutual funds; perhaps surprisingly, the three top performers are no-load mutual funds and therefore carry a very low expense overhead. Investors in these funds have been doubly satisfied that all of their investments work on making money and the expenses have been kept to a minimum. The three top performers are PIMCO StocksPlus, PIMCO GNMA and PIMCO mortgage-backed securities.

StocksPlus is a relatively small cash and bond investment, the currency spread is mainly over UK Sterling and Euros. Performance has been good with an average annual return of 3.83% over a 5-year period. GNMA mixes investment in AAA rated bonds as well as Euro futures and has a very low cost overhead of 0.50% and a five year annual return of 5.24%. Mortgage-backed securities have returned 4.78% profit in the past 5 years.

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