Pimco has handed one of the co-leads on its blockbuster Income fund a new low duration-focused spin-off, Citywire Selector has learned.
The Pimco GIS Low Duration Income fund was launched as a Dublin-domiciled vehicle on 31 May. The fund sits within the US dollar short-term bond sector.
This has emerged as one of the fastest growing funds across all asset classes over the past two years and currently has risen to $68 billion in assets within its Dublin-domiciled version.
In this new approach, Murata aims to deliver consistent income generation with a zero-to-three year duration. This is designed to ensure the fund is resilient against rising rates.
Pimco has therefore divided the fund into two components. One of which is focused on higher-yielding assets, while the other half is focused on higher-quality, growth-focused assets.
The firm added that this new approach will have a lower interest rate risk, lower credit risk, a lower distribution yield and potential for lower volatility than the much larger Pimco GIS Income fund.