Actively managed ETFs still represent just a sliver of the overall exchange traded products business, but a few issuers have found success in this arena. PIMCO, the world’s largest bond house, is a prime example.
The firm introduced the PIMCO Total Return ETF (NYSEArca: BOND), the ETF version of the massive Total Return mutual fund, in the first quarter of 2012. Since then, the so-called Bill Gross ETF has amassed over $3.8 billion in assets under management, making it the largest actively managed ETF.
PIMCO Chief Operating Office Douglas Hodge talked with ETF Trends Editor Tom Lydon at the Morningstar ETF Invest Conference in Chicago earlier this month about PIMCO’s foray into ETFs and where actively managed ETFs could be headed from here.
“It was unchartered territory for PIMCO,” said Hodge of the firm’s decision to launch BOND. “Bill Gross was insistent that we launch BOND because we wanted to provide access.”
While some have voiced concerns regarding the ability of actively managed ETFs to attract assets, Hodge sees a bright future for these funds.
“Clearly, there is demand for active ETFs, particularly in the fixed income space,” said Hodge. “The evolution of ETFs will include active and passive.”
Watch the video below to see the full interview with Douglas Hodge.
To view past video interviews, visit our videos section.