What’s PLVBX’s Investment Methodology?


Nov. 20 2020, Updated 3:44 p.m. ET

Investment methodology

The PIMCO RAE Low Volatility Plus International Fund – Class A (PLVBX) is an alternative mutual fund that seeks to exceed the total return of its benchmark the MSCI EAFE Net Dividend Index. The fund primarily uses a combination of a low volatility based long or short derivative strategy and fixed “AR Bond Alpha Strategy”—an actively managed portfolio of fixed income securities with an absolute return orientation. The fund aims to generate a low volatility portfolio with the potential to generate high income. It’s similar to PIMCO’s own RAE Low Volatility Plus Emerging Fund – Class A (PLVVX) strategy-wise, but it has exposure to a portfolio of stocks that are economically tied to countries other than the US. In contrast, the latter is only focused on stocks from emerging market countries.

The above graph gives a regional portfolio allocation comparison of PLVBX versus its benchmark.

Article continues below advertisement

Regional diversification

Almost 44% of the fund’s total assets are allocated to securities issued in the EMEA (Europe, the Middle East and Africa) region. More than 60% of the benchmark index is comprised of securities from the EMEA region. Japan, Asia-Pacific, and North America are other major regions where PLVBX is diversified. PLVBX has very negligible exposure to securities issued in the US unlike the S&P 500 Index (VFINX).

Mortgage-backed and asset-backed securities

The fund’s top holdings include mortgage-backed and asset-backed securities of subsidiaries of Citigroup (C), Credit Suisse (CS), Merrill Lynch Mortgage (IPB), Morgan Stanley (MS), and JPMorgan Chase (JPM) in its portfolio.

Next, we’ll provide a detailed holdings analysis of PLVBX.


More From Market Realist

  • Berkshire Hathaway chairman Warren Buffett
    Fund Managers
    Berkshire Hathaway 13F: Stocks Warren Buffett Is Buying in 2021
  • Man holding a laptop
    Fund Managers
    Are Cybersecurity ETFs Worth Your Money?
  • ARK Invest CEO Cathie Wood
    Fund Managers
    Avoid ARK Innovation ETF (ARKK), Might Not Recover Soon
  • Equinox gym
    Fund Managers
    Should You Buy Palihapitiya’s IPOF Stock on Equinox Merger News?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.