Although the dust is starting to settle from Bill Gross’ departure from PIMCO, the bond manager he co-founded, there is still ample chatter about outflows from the company’s mutual funds and exchange traded funds.
In the wake of Gross’ resignation, the PIMCO Total Return ETF (NYSEArca: BOND), still one of the largest actively managed ETFs, has predictably bled assets with much of that departed capital, again predictably, flowing to PIMCO rivals. [Sliding Stocks Send Investors to Bond ETFs]
However, as has been previously noted, not all PIMCO ETFs are losing assets simply because one man departed the firm. In fact, at least one of the firm’s ETFs finds itself very much as the right place at the right time.
The unheralded PIMCO 25+ Year Zero Coupon U.S. Treasury Index Fund (NYSEArca: ZROZ), managed by Dr. Vineer Bhansali, has pulled in $55.7 million of its $131.1 million in assets under management in just the past week. More important than ZROZ’s asset-gathering prowess is what it is doing for investors’ portfolios.
With Wednesday’s gain of more than 2%, ZROZ found itself in a 52-week high club almost entirely populated by bond ETFs. And with that gain, ZROZ is up more than 37% this year. Simply put, only the iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN (NYSEArca: JO) is the only non-leveraged exchange traded product that has outperformed ZROZ this year. [These Leveraged ETFs are Crushing Investors]
ZROZ’s stellar performance is a testament to the impact slumping Treasury yields and, more recently, faltering stocks have had on bonds. Ten-year yields dipped below 2% Wednesday, the first time that has happened since June 2013.