NEW YORK, April 28 (Reuters) - Pacific Investment Management Co on Friday liquidated its RAE Worldwide Fundamental Advantage PLUS Fund, a global-neutral fund which had reached more than $4 billion in assets under management in 2014, according to the Newport Beach, Calif’s website.
The portfolio’s strategy included long exposure to a portfolio of stocks through the “RAE Fundamental U.S. Large Model Portfolio” and short exposure to the S&P 500 Index, while overlaying this equity market neutral exposure with absolute return bond alpha strategy through “AR Bond Alpha Strategy”.
The RAE Fundamental U.S. Large Model Portfolio stocks are selected by Pimco’s long-time subadviser, Research Affiliates, LLC, which was founded and chaired by Rob Arnott, known on Wall Street as the “godfather of smart beta.”
“We constantly review our suite of strategies and may liquidate a fund from time to time if we feel it no longer serves our clients needs,” Michael Reid, spokesman for Pimco, said in a statement to Reuters. “We are committed to RAE and will be expanding RA relationship in equities with (the) upcoming launch of RAFI Multi-Factor ETFs.”
Pimco, a unit of Munich-based insurer Allianz SE, had $1.51 trillion in assets, has collaborated with Arnott’s firm Research Affiliates for more than a decade.
In 2015, Pimco expanded Pimco’s RAE Fundamental lineup, which uses Research Affiliates’ “smart beta,” or “fundamental indexation,” strategy of selecting, weighting and rebalancing holdings on the basis of characteristics other than market capitalization.
Two years ago, Pimco introduced a slate of six new equity funds in collaboration with Research Affiliates to cover U.S. large, U.S. small, international, global, global excluding U.S. and emerging markets. (Editing by Bernadette Baum)