The PIMCO 25+ Year Zero Coupon US Treasury (NYSEArca: ZROZ) added $11.4 million in new assets last month as that ETF continues on its path of being one of 2014’s best, regardless of asset class. Coming into Tuesday, only five non-leveraged ETFs had posted better year-to-date performances than ZROZ, which is up more than 34%.
ZROZ holds Treasuries where the coupons have been stripped, making those bonds and the ETF ideal holdings when Treasury yields fall. However, due to ZROZ’s long duration of 27 years, the ETF will be vulnerable if interest rates rise. [Why These Bond ETFs are Soaring]
BOND was not the worst offender among PIMCO ETFs in terms of October outflows. The PIMCO 0-5 Year High Yield Corporate Bond (NYSEArca: HYS) lost $576.2 million, an interesting scenario considering HYS has an effective duration of 1.91 years, one of the lowest among high-yield bond ETFs.
PIMCO Total Return ETF
