The folks at Pimco have a new mutual fund prepped and ready to go for investors seeking an alternative to money market funds. The Pimco Short Asset Investment Fund (PAIDX) opened to investors on Wednesday. The fund is PMed by Jerome Schneider, executive VP and head of Pimco's short-term and funding desk. His mandate is to follow a short-term strategy designed as a higher-yield, lower-risk alternative to money-market funds.

John Miller, head of PIMCO's U.S. retirement business, told MFWire that the new fund will give investors an opportunity to keep up with the rate of inflation and allow investors to properly save for retirement.

"What is new here [with PAIDX] is we're trying to address a key need in the marketplace to still produce yield yet manage downside protection from a risk perspective," Miller explained.

Schneider stressed that money market funds are currently not attractive and that the active management aspect of the enhanced cash strategy should bring risk more in line with the returns it produces.

"One of the things that's really important about the short-term space right now is the yield aspect of it," Schneider said. "What's important for short-term investors is try to find opportunities with proper risk-reward tradeoffs given the opportunities in the marketplace."

The fund makes both money-market and non-money-market investments, and will be available on DC I-O platforms. 

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