PIMCO launches first actively managed equity fund

By Jennifer Ablan

NEW YORK (BestGrowthStock) – PIMCO, which operates the world’s largest bond fund, is launching its first actively managed equity mutual fund, the firm said on Wednesday.

The fund, PIMCO EqS Pathfinder Fund (PTHWX.O: ), underscores PIMCO co-chief investment officers Bill Gross’ and Mohamed El-Erian’s push to deepen the firm’s products and services beyond fixed income, Pimco’s bread and butter, and into equities.

Pimco oversees more than $1 trillion in assets, mostly in fixed income. It runs the Pimco Total Return Fund (PTTRX.O: ), which has nearly $220 billion in assets under management.

The roll out of the equity-dedicated fund comes as world equities have chalked up monstrous gains. In 2009 alone, the benchmark Standard & Poor’s 500 index (.SPX: ) rallied nearly 63 percent from its March lows, while already posting returns of 8 percent so far this year.

“This (fund) is not a short-term call on the stock market,” Neel Kashkari, head of Pimco’s investment initiatives, particularly in equities, told Reuters. Kashkari is a former Goldman Sachs banker who ran the government’s $700 billion Troubled Asset Relief Program. “This is a long-term strategic move for the firm.”

The Pathfinder Fund will be managed by Anne Gudefin and Charles Lahr, formerly of Franklin Resource Inc and known for their “deep value” approach in stock selection. Gudefin and Lahr, who joined Pimco in recent months, were co-portfolio managers of the $15.6 billion Franklin Mutual Global Discovery Fund.

PIMCO has offered the StocksPLUS funds, but they are passively managed equity futures exposure with actively managed bond overlays.

Gudefin and Lahr see ample opportunities in equity markets both here and abroad even with the recent runup in prices. “We tend not to go to the places that everybody goes,” Gudefin said in an interview. She said she’s finding value in Europe, whose governments have been struggling to contain the economic fallout from Greece’s budget crisis. “You can find some companies that have really limited exposure to Europe and have great emerging market businesses…and buy them cheap.”

As an example, Nestle S.A. (NSRGY.PK: ), the Swiss confectionery behemoth, is “more of an emerging market play” and its balance sheet is one of the strongest in the food industry.

Stock Investing

(Reporting by Jennifer Ablan; Editing by Diane Craft)

PIMCO launches first actively managed equity fund