PIMCO Tactical Balanced ER Index Reviewed

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PIMCO TBI: Exclusively in Allianz Annuities

The PIMCO Tactical Balanced ER Index is designed to tactically balance exposure to U.S. equities, bonds, and cash based on market trends and opportunities.

Developed by PIMCO’s Quantitative Portfolios Group, innovative features navigate and shift risks and opportunities according to market trends. Allianz is a leader in the U.S. Annuity Market and was the #2 overall fixed index annuity company in 2020.

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PIMCO Tactical Balanced ER Index Historical Returns

Pimco tactical balance index historical returns 12. 31. 2021

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DISCLOSURES

 

PIMCO disclaims all warranties, express or implied, including all warranties of merchantability or fitness for a particular purpose or use. PIMCO shall have no responsibility or liability whatsoever with respect to any Product. Past performance is not a guarantee or a reliable indicator of future results.

PIMCO Tactical Balanced Excess Return Index performance contains back-tested performance beginning 22 April 2004, which is prior to the actual launch of the index: The PIMCO Tactical Balanced Excess Return Index launched on 2 August 2018. Hypothetical and simulated examples have many inherent limitations and are generally prepared with the benefit of hindsight. There are frequently sharp differences between simulated results and actual results.

There are numerous factors related to the markets in general or the implementation of any specific investment strategy, which cannot be fully accounted for in the preparation of simulated results, all of which can adversely affect actual results. No guarantee is being made that the stated results will be achieved.

All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates.

Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low-interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.

Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Derivatives may involve certain costs and risks, such as liquidity, interest rate, market, credit, management, and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT.

IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING.

FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS THAT CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CAN NOT BE FULLY ACCOUNTED FOR IN THE
PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

PIMCO Tactical Balanced Excess Return Index methodology adjusts exposures to achieve a volatility target. It is possible that the index could realize volatility greater than its target. PIMCO provides services only to qualified institutions and investors. This is not an offer of securities to any person in any jurisdiction. This material has been distributed for informational purposes only and should not be considered investment advice or a recommendation of any particular security, strategy, or investment product.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660, 800-3874626. ©2022, PIMCO.

Important Disclosures

PIMCO Tactical Balanced Index Overview

The DBTBIER index is designed to benefit from trends in the bond market, such as rising (or falling) interest rates. The path of U.S. interest rates is uncertain making it more important than ever to consider interest rate risk within bond allocations.

The PIMCO Tactical Balanced ER Index is comprised of the U.S. Equity Futures Custom Index, a bond component comprised of the PIMCO Synthetic Bond ER Index, and shifts weighting between them daily based on the historical volatility of each component.

PIMCO Synthetic Bond Index (SBI) is made up of 65% U.S. Investment grade credit and 35% U.S. Treasury bond exposure. The SBI is designed to allocate more to credit than traditional bond indexes in order to help mitigate drag from the historically low U.S. Treasury rates.

PIMCO TBI will adjust its interest rate exposure systematically based on market trends. As interest rates begin to trend higher, bond prices typically tend to trend lower and the index would decrease exposure to this declining asset and vice-versa when interest rates trend higher.

Pimco tbi bond exposure adjust to interest ratesinfographic

PIMCO Tactical Balanced Index Tactical Volatility Management

PIMCO Tactical Balanced Index Sample Allocations

Pimco tactical balance index er chart of sample index allocations PIMCO Tactical Balanced ER Index is governed by a set of rules based on market volatility and trends that determine the allocation of U.S. Equities, bonds, and cash. This type of allocation and index diversification helps to maintain a consistent level of volatility without giving up the potential for long-term growth.

If market volatility increases the allocation to equities will decrease and shift towards bonds to help stabilize risk. The equity allocation has gone to zero in times of severe market stress. During these times the bond allocation may decrease as well in favor of cash.

The allocation will shift back to equities as market volatility begins to stabilize. This dynamic approach can help reduce drastic fluctuations in the value of the index, which could lead to more successful long-term outcomes.

Volatility Managed Indexes In Index Annuities

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Allianz Life was the first insurance company to offer a volatility-managed index in a fixed index annuity (Bloomberg Universal Dynamic Index: BUDBI). Today volatility managed indexes have become very popular and are available inside most indexed annuities.

Some index options illustrate unbelievably well but it is important to consider who developed the index and do they have a robust and time-tested process.

The PIMCO Tactical Balanced Index II is supported by the full spectrum of PIMCO’s extensive global resources. Their team of experts develops and executes managed volatility and other quantitative portfolios, which total $48 billion in assets under management (March 31, 2021).

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