Pacific Investment Management Co. (PIMCO) has taken a different angle upon entering into the exchange traded fund (ETF) market. By filing a prospectus for its first ETF, it has taken the next step.
As of July 29, the world’s largest bond fund manager applied with the Securities and Exchange Commission (SEC) for exemptive relief to offer ETFs. Initially, the firm said it was going to offer an ETF that passively tracked the Lehman Brothers U.S. Aggregate Bond Index, but the course has shifted somewhat.
The latest filing revealed that PIMCO filed for a proposed 1-3 Year Treasury Index Fund, reports Murray Coleman for Index Universe. The recent liquidity among the markets is a possible explanation for taking a different tack. Corporate fixed-income markets had a harder time last month than did Treasuries.
According to the PIMCO 1-3 Year U.S. Treasury Index Fund’s prospectus, it will trade on the NYSE Arca exchange and follow a Merrill Lynch benchmark.
PIMCO’s entry into the ETF space is exciting and could be a sign of things to come. We know they’ve explored the market from all angles and are entering the world of ETFs with a well-thought out plan.
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.