Orange County Business Journal

New Pimco Fund Focused on Inflation

Jane Yu Tuesday, September 20, 2011

Newport Beach-based Pacific Investment Management Co. has launched a new fund intended to take advantage of potential gains to be made amid what it sees as global inflationary trends.

The Pimco Inflation Response Multi-Asset Fund aims to hedge risks such as rising commodity prices and weakening developed-nation currencies with a broad range of assets including: treasury inflation protected securities, commodities, gold, emerging market currencies and real estate investment trusts.

The fund is managed by Mihir Worah in Newport Beach.

“Traditional inflation hedges often don’t provide an effective response to the wide-ranging drivers of inflation,” Worah said.

Pimco sees inflation as an ongoing concern, along with a long-term trend of declines in the value of the dollar. A spike in commodity prices earlier this year has recently eased, but the fund manager still sees an “inflationary bias” in the Federal Reserve, according to Worah.

The new fund currently favors treasury inflation protected securities and gold, with lesser holdings in commodities and real estate, according to Worah.

Pimco, which manages $1.3 trillion in investments and runs the industry’s largest mutual fund, has been expanding its offerings with a push into the exchange-traded funds. One of the recently launched funds is the “hedge-style” Credit Absolute Return Fund, which looks to offer investors greater flexibility than a traditional approach.