Bill Gross is hoping PIMCO Total Return ETF can someday grow to become the world’s largest exchange traded fund by assets after it lists in March.
PIMCO says it plans to roll out an ETF version of Total Return Fund on March 1. Actively managed ETFs haven’t been a big hit so far, but Gross obviously brings a sterling reputation and an enviable track record to active ETFs. [PIMCO Says Total Return ETF to Launch in March]
PIMCO Total Return Fund holds about $244 billion in assets spread across various share classes. The vaunted fund, which is overseen by bond guru Gross, will celebrate its 25th anniversary later this year.
Even with the fund’s well-documented missteps in 2011, Total Return Fund has handily beaten its benchmark and most peers over longer time periods.
“Despite a fine 2010 showing and first-half 2011 gains that edged out the intermediate-bond category average, some investors and pundits have talked as if this fund has lost its edge,” Morningstar’s Eric Jacobson writes in an analyst profile of the fund. Shunning Treasury bonds in the first half of the year and lightening up on interest-rate exposure turned out to be mistakes, he wrote.
“The portfolio’s 1.1% third-quarter loss has been comparatively abysmal and has dragged its year-to-date return to the group’s bottom decile–but it’s not catastrophic. The fund still boasts a gain for the year, and some of the best three-, five-, 10-, and 15-year gains for any of its kind,” Jacobson added.
Gross, speaking at the recent 2012 ETF Virtual Summit, said an ETF wrapper for Total Return Fund is something he’s wanted to see happen.
ETFs have “advantages” and allow small investors to easily access PIMCO strategies, he said. PIMCO over the summer said Total Return ETF will charge a management fee of 0.55%. [PIMCO Discloses Fees for Total Return ETF]