Unlike some of the other families of funds reviewed, PIMCO Mutual Funds focuses on serving the institutional money manager. This difference will become apparent later on, when we discuss minimum investments. That does not mean individuals should ignore PIMCO funds. In fact, they should be very interested.
We're including PIMCO in these reviews because investors still have the ability to buy into a fund as part of a larger organization. For example, the mutual fund offerings of PIMCO might be included as part of a 401(k) plan or 403(b) account.
PIMCO Funds Mutual Funds is part of the Pacific Investment Management Company, which claims to be one of the world's leading fixed income money managers. This family of funds is a relative newcomer. The history of the company dates back to 1971, when it started out with just $12 million in assets under management. The company claims to have 2,400 employees in ten countries. As of September 2017, PIMCO had over $1.61 trillion in assets under management. They've experienced very good growth over the past 40 years.
With its focus on the institutional money manager, the average investor may only be familiar with the PIMCO name when it appears as part of a larger offering. Since the minimum investment on all mutual funds is $1 million, most investors would participate in a fund as part of a larger pool of employees. For example, an employee might be able to select a PIMCO fund as part of a 401(k) plan.
Morningstar ratings indicate the expense ratios for mutual funds at PIMCO are all Average and range from 1.02% for their international stock funds, to 0.75% for their municipal bond fund. The focus at PIMCO is clearly on taxable bond assets (77.97%) followed by international stock funds (3.78%).
The minimum investment for many PIMCO funds is $1 million. This is clearly indicating the target client is the institutional investor. PIMCO has somewhat of a balance when it comes to loads, with approximately 85.3% of the funds being no-load mutual funds. As of September 2017, the average return on a PIMCO fund was 2.77% over the last five years.
As was the case with OppenheimerFunds, some of the top-rated PIMCO mutual funds are bond funds. Fortunately, all three of these funds are also a no-load fund with a very low expense ratio. That means more of the investor's money is put to work earning returns. That being said, here is a list of the top performing mutual funds from PIMCO as of September 2017:
Assets: $436.4 million
Category: Large Value
Specialty: Long-Short Credit
Top Three Holdings: IRS USD 2.00, US 10 Year Note, 90-day Eurodollar Futures
Minimum Investment: 1 million
Expense Ratio: 0.90%
5-Year Average Return: 3.48%
Assets: $1.3 billion
Category: Long Government
Top Three Holdings: US Treasury Bonds, US Treasury Notes.
Minimum Investment: $1 million
Expense Ratio: 0.50%
5-Year Average Return: 3.61%
Assets: $95.9 billion
Category: Multi-Sector Bond
Top Three Holdings: IRS USD 2.20, CIRS USD 5.25, IRS JPY 0.45.
Minimum Investment: $1 million
Expense Ratio: 0.45%
5-Year Average Return: 6.92%
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