PIMCO hits home run

Tools

It was big news when PIMCO launched an exchange-traded fund (ETF) to mimic its flagship Total Return mutual fund.

Given the stature of PIMCO and Bill Gross, who manages both the fund and the ETF, the launch was one of the most closely watched in recent memory. So far, the results have been favorable.

CNNMoney notes that,  "Pimco's Total Return ETF has already managed to rake in over $270 million in assets, making it the sixth biggest actively-managed ETF on the market. And since its March 1 debut, the ETF has also outperformed its major competitors, gaining 1.7 percent compared with the modest declines suffered by index-based Vanguard's Total Bond Market ETF and BlackRock's iShares Barclays Aggregate Bond ETF."

It will likely help drive even more demand when the company changes the ticker from "TRXT" to "BOND." The big question for many is whether this is a defining moment for the actively managed ETF market. To be sure, the term seems like an oxymoron to some. But the concept seems to be striking a chord with investors.

Gross tells CNNMoney that the company is not going to rest on its laurels. "Gross said 'natural' follow-up products would include funds that invest in different sectors of the bond market, such as corporate debt and mortgage-backed securities, as well as those that offer global diversification."

You can bet other companies will act as well.

For more:
- here's the article

Related articles:
Bond guru pitches new ETF
PIMCO pulls out of trade group