Pimco files for patent on new managed-payout funds

Treasury inflation-protected securities are the underlying investments of two managed-payout funds launched today by Pacific Investment Management Co. LLC that are designed to provide retirees with systematic income distributions — a strategy so unique that Pimco has filed for patent protection. The Pimco Real Income Fund 2019 and Pimco Real Income Fund 2029 are unique because they use a “laddered” portfolio of TIPS, meaning maturities are structured over a predetermined time frame to generate systematic, inflation-adjusted distributions. Distributions are a combination of interest and principal, both of which are adjusted automatically to the rate of inflation, and are paid out monthly until the funds reach their maturity date. “The Pimco Real Income funds are an innovative investment solution for retirees,” Tom Streiff, executive vice president and retirement product manager for Pimco, said in a statement. “The funds are a natural fit with annuity products and can supplement Social Security, defined benefit plans and other sources of retirement income in a manner that protects against inflation.”