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September 26, 2011 at 10:40 AM
A few weeks ago I wrote about the potential opportunities with alternative investments. I offered my best ideas to those who would email me, and because many of you did, I thought I’d follow up and present some alternative investments which I believe merit consideration.
Before disclosing my choices, please understand that I have no axe to grind, no dog in the hunt, and that every fund mentioned is based on objective analysis. Here’s a few on my list.
PIMCO Global Multi Asset Fund
There are three managers on PGAIX, which was established in October 2008. One of the managers is Mohammed El-Erian, the former portfolio manager of the Harvard endowment. This fund is essentially 60% MSCI and 40% AGG and uses multiple tail risk hedging strategies to minimize downside risk.
PIMCO All Asset All Authority Fund
This fund, PAUIX, is managed by Rob Arnott, a long time favorite of the investment community. With a target return of CPI plus 6.50%, the expectation is that investors will receive a positive “real return” over time. This fund contains less risk than the Global Multi Asset fund and was established in October 2003.
PIMCO Unconstrained Bond Fund
This may well be the only fund of its kind. Morningstar classifies PFIUX as a Multi-Sector Bond fund, but in reality, Morningstar doesn’t have an appropriate category for this type of fund. The target return is LIBOR plus 3.50%. Established in June of 2008, the unique aspect of this fund is that its duration can range from negative three years to positive eight years. Therefore, when interest rates do begin their ascent, with a negative duration, it should provide a positive return.
