Actively managed exchange traded funds (ETFs) recently hit a significant milestone as PIMCO‘s actively managed ETF joins the billion dollar club.
The PIMCO Enhanced Short Maturity Strategy Fund (NYSEArca: MINT) has become the first actively managed ETF to break the $1 billion milestone, and the ETF is sitting comfortably at $1.18 billion in assets, writes Hung Tran for The Mutual Fund Wire.
PIMCO’s MINT ETF is a money-market alternative for investors who are seeking a way to store excess cash without the prospect of minimal returns offered by Treasuries and money-market funds. The fund’s asset base moves inversely with market performances due to its role as a cash alternative, and its performance has been able to outdo that of other passive ETFs operating in the money market area.
As of February, only 145 ETFs are in the billion-dollar-club, which makes up 12% of the 1,100 ETFs available in the U.S., comments Shishir Nigam for Daily Markets.
U.S. bonds gained after the earthquake in Japan, but the safe haven move reversed as Japanese investors went back into yen and out of other assets – Japanese investors are the third-largest holders of U.S. Treasury debt. [Why Current Environment Is Affecting Treasury Yields and ETFs.]
Lately, state munis have also been slammed, driving most muni bond ETFs well below their long-term trend lines. Moody’s Investor Service stated that U.S. municipal governments will face lower demand for debt and higher borrowing costs, due to a combined budget deficit of $100 billion this year and the extension of Bush-era tax cuts, which lowered the attractiveness of muni’s tax-exempt status. [Is There Hope for Muni Bond ETFs?]
For more information on actively managed ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.