Jan 11 2010

Mutual Fund Monday: PIMCO Launching New Global Fund.

According to a recent Edgar filing , PIMCO will soon be launching a new fund: PIMCO Global Opportunities Fund .

It’s going to be a global value fund of common and preferred stock. The fund will target equities in one of 3 countries, one of which may be the U.S..

Criteria used for determining whether a stock is undervalued by the market include: asset value, book value and cash flow and earnings estimates.

The Fund considers large and mid cap companies to have a market capitalization greater than $1.5 billion, but the fund is not limited by size and may invest without limitation in securities that are economically tied to foreign countries as well as emerging market countries.

The fund is also not limited solely to stocks and may also invest in U.S. and foreign government debt and other debt securities like bank loans. PIMCO selects such securities on the basis of value and not just rate or rating. This leaves the management team open to high yield bonds (A.K.A. Junk Bonds) and any rating.

As you can see, this is a pretty unlimited fund, and not strictly adhering to any one market cap, investing style or security type but it could make for a good core holding. The folks at PIMCO have a good name, and their bond team are among some of the few to have not only called the mortgage meltdown successfully, but also positioned their funds to take advantage at just the right time.

Since the fund can invest in both equities and debt securities in foreign countries, this opens them up to being susceptible to equity risk, currency risk, leverage risk and pretty much any other kind of risk when investing in anything other than CDs. :)

PIMCO has not yet named portfolio managers for the fund.

If you’re interested in this fund, feel free to read the whole Edgar filing – it’s informative, but not easily digested for beginners. Still, it’s worth a read if only to acquaint yourself with the kinds of data found in a Form N-1A SEC filing.


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