Pimco joins actively managed ETF biz

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Pimco joins actively managed ETF biz

Bond giant says new fund boasts yields superior to money funds', transparency

By David Hoffman

November 22, 2009 6:01 am ET

Pacific Investment Management Co. LLC last week launched its first actively managed exchange-traded fund.

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The Pimco Enhanced Short Maturity Strategy Fund (MINT), aims to preserve capital while offering more attractive yields than investors earn from money market funds, the company said.

“One of the things that drove our thinking regarding launching an active ETF in this space was that this is an area of the investment universe where investors don't want surprises,” said Tammie Arnold, a managing director and head of the Global Wealth Management group at Pimco. “While this is not a money fund, it is transparent. Every day, investors can look on our website and look at the holdings of our fund.”

Pimco's launch follows the introduction earlier in the week of a much different actively managed ETF: the iShares Diversified Alternatives Trust (ALT), from Barclays Global Investors.

That fund's objective is to maximize absolute returns from its portfolio of exchange-traded-futures contracts and foreign-currency forward contracts while seeking to reduce the risks and volatility inherent in those investments.

It accomplishes that neat trick, Barclays said, by taking long and short positions in historically correlated assets.

E-mail David Hoffman at dhoffman@investmentnews.com.