With an effective duration of just 1.75 years, LDUR certainly delivers on the low duration promise. The rub there is a 30-day SEC yield of just 1.31%, or nearly 100 basis points below 10-year Treasuries, but the good news there is LDUR is not risky from a credit profile perspective.
Although 54% of the ETF’s weight is allocated to U.S. corporates with another 8% devoted to emerging markets debt, over 37% of LDUR’s holdings are rated at least BBB.
” To sweeten the pot for potential investors, PIMCO late last month cut the fee for LDUR to 0.49% from 0.57%,” according to Goldsborough.
LDUR is an ETF adaptation of the PIMCO Low-Duration Fund Institutional (PTLDX). PTLDX has generated an average annualized return of 4.6% over the past 15-years, 3.9% over the past 10-years and 5.0% over the past five-years.
PIMCO Low Duration ETF
