Pimco Adds to Gold Holdings on Inflation Concern

scott

http://www.foxbusiness.com/news/2012/08/22/pimco-adds-to-gold-holdings-on-inflation-concerns/

"Three of Pimco's portfolio managers, including the head of the commodities group Mihir Worah and Mr. Johnson, have been on a 17-city U.S. tour since June to raise awareness among institutional investors and larger financial advisers.

Their message: the trifecta of loose monetary policy, persistently high levels of sovereign debt and rising commodity prices will drive inflation higher.

Pimco expects currency devaluation to remain a central theme in the market as global liquidity swells thanks to continued easy-money efforts from the world's central banks. Interest rates, meanwhile, will need to stay low as government debt runs at a high proportion to the overall economy.

"Gold is the currency without a printing press," Mr. Johnson says."

claimui

The article discusses the Pimco Commodity Real Return Strategy Fund, but I thought both PIMCO commodities funds are index funds. They shouldn't be buying any more gold than is mandated by their respective indexes. Unless something has changed?

scott

Reply to @claimui: My thought is that the fund is an attempt to try to get a similar return - and the hope is an improvement upon, using the active management of collateral - to the index. Likely, the commodities portion of the fund is not very actively managed, but apparently tweaks can be made. I've switched almost entirely from Pimco Commodity RR to AQR's new actively managed fund.

Additionally, Pimco Multi-Asset Inflation was just allowed to boost gold holdings to 25% from 15%, according to this week's M* Fund Times. I've also noticed GLD in Pimco EQS long/short and Pimco EQS Pathfinder.