Bond giant PIMCO has filed with the Securities and Exchange Commission to introduce an exchange traded fund (ETF) that would be managed by Bill Gross.
Morningstar first reported on PIMCO’s ETF filing, which can be found here.
The fund, called PIMCO Total Return ETF, would be actively managed and not seek to replicate an index, according to the filing. It would typically invest at least 65% of its total assets in a diversified portfolio of fixed-income securities of varying maturities, according to paperwork PIMCO filed with the SEC.
Gross runs the world’s biggest bond fund, PIMCO Total Return Fund.
PIMCO’s largest existing ETFs by assets include PIMCO Enhanced Short Maturity (NYSEArca: MINT) and PIMCO 1-5 Year U.S. TIPS (NYSEArca: STPZ).
PIMCO Total Return ETF could launch relatively soon because the money manager has already received exemptive relief from the SEC for active ETFs, said Tom Lydon, editor of ETF Trends, which publishes this website. For example, MINT is an actively managed ETF.
An ETF version of PIMCO Total Return Fund could be a turning point for the industry, which recently broke through $1 trillion in total assets.
“There hasn’t really been a big personality behind an ETF because most track indexes. There are rock stars that manage active mutual funds, but not ETFs,” Lydon said. “PIMCO and Bill Gross have the brand, the status and the track record.”
The PIMCO Total Return ETF would disclose portfolio holdings daily, Morningstar reported.
“Our argument long has been that disclosing portfolio holdings daily–a hangup for some traditional mutual fund managers who want to roll out actively managed ETFs–wouldn’t be much of a hindrance. After all, PIMCO is so big that many trading desks have decent ideas already about when the firm is buying and selling,” analyst Robert Goldsborough wrote.
“Plus, we have advocated for an actively managed version of PIMCO Total Return Fund under the argument that the fees for retail investors could be lower, the tax efficiency could be higher, and the fund distribution channel is open to all,” he added.