Bloomberg News

Pimco Files to Open Three Active Exchange-Traded Funds

June 08, 2012

Bill Gross

Bill Gross, co-chief investment officer of Pacific Investment Management Co. (PIMCO). Photographer: Andrew Harrer/Bloomberg

Pacific Investment Management Co. plans to open three actively managed bond exchange-traded funds, after an ETF version of Bill Gross’ flagship fund attracted more than $1 billion in the three months since it started.

Pimco Diversified Income ETF will invest at least 65 percent of its assets in debt of varying maturities, according to a June 7 filing with the Securities and Exchange Commission. Pimco Real Return ETF will put at least 80 percent of its assets in inflation-indexed bonds of different maturities, and Pimco Low Duration ETF will have an average duration, or interest-rate sensitivity, ranging from one year to three years.

Mike Reid, a spokesman for Newport Beach, California-based Pimco, declined to comment on the filing.

The new funds will bring the total of actively managed ETFs at Pimco to nine. An active ETF version of Gross’s $261 billion Total Return Fund, the world’s largest mutual fund, has grown to $1.29 billion in assets since it started trading on March 1. The ETF has returned 5.6 percent since then, compared with 2.3 percent for the Total Return mutual fund.

Active ETFs are designed to blend the trading flexibility and accessibility of ETFs with the stock- or bond-picking ability of active management.

Pimco Diversified Income ETF will be managed by Curtis Mewbourne, who runs the mutual fund (PDIIX:US)version of that name and returned 5.9 percent this year, beating 85 percent of peers, data compiled by Bloomberg show.

Pimco Low Duration ETF will be managed by Marc Seidner. Gross, Pimco’s founder and co-chief investment officer, manages the Pimco Low Duration mutual fund. It has returned 2.8 percent this year, ahead of 93 percent of its peers.

Pimco Real Return ETF will be overseen by Mihir Worah, who runs the Real Return mutual fund. That fund (PRRIX:US) has returned 5.8 percent this year to beat 97 percent of its peers.

Active ETFs accounted for less than 0.5 percent of the $1.19 trillion in U.S.-registered ETF assets as of April, according to the Investment Company Institute.

To contact the reporter on this story: Alexis Leondis in New York at aleondis@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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Companies Mentioned

  • PDIIX
    (PIMCO Diversified Income Fund)
    • $11.86 USD
    • -0.01
    • -0.08%
  • PRRIX
    (PIMCO Real Return Fund)
    • $11.59 USD
    • -0.03
    • -0.26%
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