PIMCO, a global investment management firm and prominent bond fund provider, recently introduced the first of three new exchange traded funds that track country-specific government debt.
On Oct. 31, PIMCO launched the PIMCO Australia Bond Index Fund (NYSEArca: AUD). The company plans to list the PIMCO Canada Bond Index Fund (NYSEArca: CAD) and PIMCO Germany Bond Index Fund (NYSEArca: BUND) later on. [Vanguard Readies International Bond Funds, ETFs]
According to a PIMCO press release, the funds will help investors gain exposure to countries with solid balance sheets and debt dynamics that will hold up in periods of slower global growth.
Australia is a large exporter commodities and is a key trading partner with many emerging market economies in Asia. Additionally, the Australian dollar is one of the higher-yielding currencies in the world. [Investors Get More ETF Options for Emerging Market Bonds]
Canada is also a large exporter of commodities, including agricultural products, raw materials and oil. The country has a historically low debt burden, an expanding economy and sound fiscal policy.
Germany, Europe’s largest economy, has held up during the Eurozone financial debalce. The country is the world’s second largest exporter.
“These new index ETFs are designed to help investors access select countries that may offer better risk-adjusted returns in this New Normal environment, and benefit from PIMCO’s trading and investment expertise in local markets,” Tammie Arnold, managing director and global head of the firm’s ETF business, said in the press release. “With ETFs, investors may benefit from convenient access to PIMCO’s capabilities as well as the portfolio transparency and intra-day pricing attributes of the ETF vehicle.”
For more information on international sovereign debt, visit our international Treasury bonds category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.