The PIMCO Total Return ETF (NYSEArca: BOND), the exchange traded fund managed by Bill Gross prior to his resignation from the firm he founded, lost another $437 million in assets last month.
BOND, the second-largest actively managed ETF lost $631 million in September. BOND, “an actively managed ETF designed to mimic the strategy of the flagship mutual fund, saw nearly $550 million in outflows in the two days following news of the departure on Sept. 26 of longtime manager Bill Gross,” according to Reuters.
Although BOND gets plenty of attention because of its hefty status among actively managed ETFs and because Gross, now with Janus Capital (NYSE: JNS), was the manager, it is also worth noting that some PIMCO ETFs managed to add new assets last month. [Some PIMCO ETFs Gain Cash After Gross Leaves]
BOND is now managed by Scott Mather, Mark Kiesel and Mihir Worah. The new managers have already made some adjustments to the ETF, paring the fund’s exposure to Canadian debt last month while slightly increasing its exposure to Mexican sovereign bonds.
The $2.5 billion BOND allocates nearly a third of its weight to U.S. corporates with another 29% going to U.S. government debt and 15% allocated to mortgage-backed securities, according to issuer data.
Notably, the PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT) added $64.1 million last month, further cementing the fund’s status as the largest actively managed ETF in the U.S. MINT, which some investors use as a money market replacement tool due to the ETF’s scant effective duration of 0.45 years, is managed by Jerome Schneider and now has almost $3.8 billion in assets under management.
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
