PIMCO will limit its push into equities to globally focused stock funds, said Neel Kashkari, managing director and head of new investment initiatives, as the traditional bond giant debuted its first stock mutual fund Wednesday.
“You will see us offer a handful of strategies that are globally oriented that can benefit from PIMCO’s insights” on currencies and economies, Mr. Kashkari said in a telephone interview. “We’re not going to launch a large-cap U.S. fund.”
PIMCO on Wednesday started selling its first stock mutual fund, PIMCO EqS Pathfinder, according to spokesman Mark Porterfield. The fund will be run by Anne Gudefin and Charles Lahr, executive vice presidents and global equity portfolio managers. The two came from Franklin Resources in December.
PIMCO will grow its equity unit by adding executives and strategies, rather than making acquisitions, according to Mr. Kashkari. The firm plans to offer fewer than 10 equity strategies, including emerging markets and global growth, he said.
“We wanted to take a measured and deliberate approach,” Mr. Kashkari said.
PIMCO’s focus stems in part from its “new normal” philosophy, which states that investors should expect lower-than-average market returns because of heightened government regulation and faster growth outside the U.S. as its role in the global economy shrinks.
PIMCO’s EqS Pathfinder fund can invest in distressed debt and will try to profit from bets on corporate mergers. The “deep-value” strategy consists of picking stocks the managers deem 30% to 40% cheaper than their worth, Ms. Gudefin said in a telephone interview.