PIMCO Total Return ETF (NYSEArca: TRXT) manager Bill Gross said the fund disclosing its portfolio holdings daily won’t allow traders to “front run” the ETF’s trades.
The bond fund manager told Yahoo Finance’s Breakout he doesn’t think an investor could look at the daily data and “see exactly a change in strategy or some type of nuance that would give away any of PIMCO’s secret sauce.”
PIMCO launched an ETF version of the $250 billion Total Return Fund in the beginning of March. [PIMCO Total Return ETF is Active Fund Trailblazer]
Gross said the ETF is outperforming major bond indices in the first two weeks or so of trading, adding active management definitely has its place in the ETF business.
The new fund provides a little more liquidity and ease of trading for investors, he added.
The ETF won’t be a carbon copy of Total Return Fund because it can’t use options, futures and swaps like Total Return Fund.
“Those aren’t a considerable portion of the Total Return Fund, but nonetheless, there’s going to be those minor differences in terms of the non-derivative characteristic,” Gross told Breakout.
When asked about the bond market, the manager said the Federal Reserve controls the front end of the yield curve but doesn’t have as much control over long-term Treasury bond rates, where private investors and inflation expectations are major factors.