PIMCO Launches 3 RAFI Dynamic Multi-Factor Equity ETFs

The smart beta ETFs seek to provide diversified exposure to multiple equity factors linked to higher return potential

NEWPORT BEACH, Calif., Sept. 06, 2017 (GLOBE NEWSWIRE) -- PIMCO, a leading global investment management firm, announces the launch of three smart beta equity ETFs designed to provide investors with diversified exposure to multiple equity factors, including value, quality, low volatility, momentum and size. The ETFs are benchmarked to the Research Affiliates’ RAFI Dynamic Multi-Factor indexes, which employ an innovative and dynamic factor weighting methodology in an effort to generate attractive returns for clients.

The three ETFs are:

  • PIMCO RAFI Dynamic Multi-Factor U.S. Equity ETF (Ticker: MFUS)
  • PIMCO RAFI Dynamic Multi-Factor International Equity ETF (Ticker: MFDX)
  • PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (Ticker: MFEM)

“PIMCO is excited to partner with Research Affiliates in offering the PIMCO RAFI Dynamic Multi-Factor Equity ETFs,” said Andrew Pyne, Executive Vice President and strategist focused on PIMCO’s equity solutions. “These ETFs help investors overcome the challenge of determining which factors to include and at what weighting. By dynamically adjusting factor allocations in an ever-changing market, PIMCO RAFI Dynamic Multi-Factor Equity ETFs offer a compelling solution for clients navigating an increasingly disparate smart beta and factor landscape.” 

In a low return environment, investors are looking for strategies that can potentially generate above-market returns in the years ahead. The research and theory backing the RAFI indexes support that the five equity factors – value, quality, low volatility, momentum and size – have the potential to outperform the broader equity market over the long term.

PIMCO RAFI Dynamic Multi-Factor ETFs seek to deemphasize the factors that are expensive compared to historical norms while emphasizing those that are undervalued, thereby introducing a buy-low, sell-high discipline in the factor investing world.  Moreover, the PIMCO RAFI ETFs incorporate fundamental indexing, which weights stocks by economic size, rather than by market capitalization, which can skew weightings toward stocks already trading at high valuations.

Rob Arnott, Chairman and Chief Executive Officer of Research Affiliates said: “The new PIMCO RAFI Dynamic Multi-Factor ETFs marry multi-factor investing with a true1 smart beta strategy, Fundamental Index, thereby providing two alpha engines in a single package. I’m proud to be affiliating with PIMCO to offer products that reflect these powerful insights.”

About PIMCO 
PIMCO is a leading global investment management firm, with offices in 11 countries throughout North America, Europe and Asia. Founded in 1971, PIMCO offers a wide range of innovative solutions to help millions of investors worldwide meet their needs. Our goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline. PIMCO is owned by Allianz S.E., a leading global diversified financial services provider.

About RAFI Indices
RAFI Indices, LLC, is a California limited liability company established in 2016, which is a wholly owned subsidiary of Research Affiliates Global Holdings, LLC. RAFI Indices, LLC, constructs, publishes, and licenses various indices and does not offer or provide investment advice or offer or sell any securities, commodities, or derivative instruments or products. The RAFI trademark is used under license by RAFI Indices, LLC. The RAFI Indices, LLC, corporate name and all related logos are the exclusive intellectual property of Research Affiliates, LLC.

About Research Affiliates
Research Affiliates, LLC, is a global leader in smart beta and asset allocation. Founded in 2002 and based in Newport Beach, California, Research Affiliates is dedicated to creating value for investors and seeking to have a profound impact on the global investment community through its insights and products. The firm’s investment strategies are built on a strong research base and are led by Rob Arnott and Chris Brightman. Research Affiliates delivers solutions in partnership with some of the world’s leading financial institutions through their offerings of mutual funds, ETFs, separately managed accounts, and/or commingled accounts. As of June 30, 2017, about $184 billion in assets are managed worldwide using investment strategies developed by Research Affiliates.       

1 Here we define true smart beta as: a passive, transparent, replicable index that weights stocks based on some metric other than price.

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing.  This and other information are contained in the Fund’s prospectus, which may be obtained by contacting your PIMCO representative.  Please read the prospectus carefully before you invest.

A word about risk: Equities may decline in value due to both real and perceived general market, economic and industry conditions. Investing in foreign-denominated and/or -domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Model Risk is the risk that the investment models used in constructing the Underlying Index may not adequately take into account certain factors and may result in a decline in the value of the Underlying Index and, therefore, the Fund. Management and Tracking Error Risk is the risk that the portfolio manager’s investment decisions may not produce the desired results or that the Fund’s portfolio may not closely track the Underlying Index for a number of reasons. 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. Investors should consult their investment professional prior to making an investment decision.

Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. Shares of an ETF are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF’s prospectus.

Premiums (when market price is above NAV) or discounts (when market price is below NAV) reflect the differences (expressed as a percentage) between the NAV and the Market Price of the Fund on a given day, generally at the time the NAV is calculated. A discount or premium could be significant. Data in chart format displaying the frequency distribution of discounts and premiums of the Market Price against the NAV can be found for each Fund at www.pimcoetfs.com.

Smart beta refers to a benchmark designed to deliver a better risk and return trade-off than conventional market cap weighted indices.

Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

This material has been distributed for informational purposes only and should not be considered as 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. ©2017, PIMCO.

PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY, 10019 is a company of PIMCO.



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