The firm known most for active fixed income management is launching a rather dull bond index-based Exchange Traded Fund according to Dow Jones:
Bond mutual fund giant Pacific Investment Management Co. plans to dip its toe into the fast-growing exchange-traded fund business.
The Newport Beach, Calif. firm, often known as Pimco, said its initial ETF would follow the Lehman Brothers U.S. Aggregate Index, a broad bond market benchmark that is already the basis for popular ETFs from Barclays PLC (BCS), State Street Corp. (STT), and Vanguard Group."
PIMCO - the home of famed bond fund manager Bill Gross - actually manages several ETFs - if you define an ETF as a fund that trades on an exchange...they manage closed-end funds. Closed-end funds are actively managed with higher fees, and are often leveraged, but lack the snazzy arbitrage process that keeps the fund market price in check with the actual value of the fund (net asset value or NAV).
As more fund money goes to ETFs, big actively managed firms are damned if they do, damned if they don't: they don't want to manage lower fee index ETFs, but don't want to see their higher fee actively managed money go out the door either. PIMCO has their work cut out for them. Second and third versions of existing ETFs don't gather the trading volumes or assets of the earlier to market funds. Perhaps the target customer is other PIMCO clients.
PIMCO To Launch Bond ETF
The firm known most for active fixed income management is launching a rather dull bond index-based Exchange Traded Fund according to Dow Jones:
Bond mutual fund giant Pacific Investment Management Co. plans to dip its toe into the fast-growing exchange-traded fund business.
The Newport Beach, Calif. firm, often known as Pimco, said its initial ETF would follow the Lehman Brothers U.S. Aggregate Index, a broad bond market benchmark that is already the basis for popular ETFs from Barclays PLC (BCS), State Street Corp. (STT), and Vanguard Group."
PIMCO - the home of famed bond fund manager Bill Gross - actually manages several ETFs - if you define an ETF as a fund that trades on an exchange...they manage closed-end funds. Closed-end funds are actively managed with higher fees, and are often leveraged, but lack the snazzy arbitrage process that keeps the fund market price in check with the actual value of the fund (net asset value or NAV).
As more fund money goes to ETFs, big actively managed firms are damned if they do, damned if they don't: they don't want to manage lower fee index ETFs, but don't want to see their higher fee actively managed money go out the door either. PIMCO has their work cut out for them. Second and third versions of existing ETFs don't gather the trading volumes or assets of the earlier to market funds. Perhaps the target customer is other PIMCO clients.
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