PIMCO experts recommend investors diversify their investments into a variety of areas rather than simply focusing on U.S. index funds, Treasury bills and cash equivalents, according to the PIMCO website. Investors have the potential to increase returns by investing in bond funds, mortgage-backed securities and international funds.
In a low interest rate environment, investors should purchase short-term, investment-grade bond funds rather than money market funds, explains Ashish Tiwari and James Moore for PIMCO. PIMCO's Jason Mandinach recommends mortgage-backed securities as an alternative to U.S. Treasury bills. These strategies decrease the amount of an investor's portfolio tied up in low-yielding investments.
PIMCO fund manager Brad Kinkelaar focuses on purchasing undervalued U.S. and foreign securities for his PIMCO Dividend and Income Builder Fund, reports Simon Constable for Barron's. Without a myopic focus on the U.S. market, Kinkelaar can find more opportunities in out-of-favor sectors throughout the world.