PIMCO has received regulatory approval to launch exchange traded fund adaptations of three mutual funds, similar to its highly successful PIMCO Total Return ETF (NYSEArca: BOND).
The actively managed PIMCO Diversified Income Exchange-Traded Fund (DI), PIMCO Real Return Exchange-Traded Fund (no ticker provided) and PIMCO Low Duration Exchange-Traded Fund (LDUR) registrations went through Monday, but no launch date has been scheduled, according to an emailed note. [ETF Chart of the Day: PIMCO Total Return]
The three new offerings would help PIMCO market three mutual fund strategies in an ETF wrapper, including:
- PIMCO Real Return Fund (PRRIX): 2.31% 30-day SEC yield
- PIMCO Low-Duration Fund (PTLDX): 1.27% 30-day SEC yield
- PIMCO Diversified Income Fund (PDIIX): 3.04% 30-day SEC yield
“The investments made by the ETFs and the results achieved by the ETFs at any given time are not expected to be the same as those made by other funds for which PIMCO acts as investment adviser, including funds with names, investment objectives and policies similar to the newly filed ETFs,” a PIMCO spokesman told Barron’s. The funds are “not intended to be clones of those funds in an ETF vehicle,” he said.
According to the most recent filing, the Diversified Income ETF will try to generate maximum total return through fixed-income assets, such as bonds, debt securities and other similar instruments issued by U.S. and non-U.S. public- or private-sectors with varying maturities. The diversified income fund has an average portfolio duration of between three to eight years, based on interest rate forecasts. DI will have an 0.85% expense ratio.
Duration is used to measure a bond’s price to sensitivity to changes in interest rates – changes in interest rates will have a greater effect on long duration bonds.