Pimco launches first actively managed covered-bond ETF

'A compelling alternative to broad European government bonds,' fund manager says

Jan 13, 2014 @ 1:22 pm (Updated 1:43 pm) EST

Pacific Investment Management Co. has joined with London-based exchange-traded-products provider Source UK Services to offer the first actively managed ETF focused on covered bonds.

Kristion Mierau, head of Pimco's European covered bond portfolio management team, runs the Pimco Covered Bond Source UCITS ETF, according to a statement on Source's website. The fund is traded on Deutsche Böse AG and has a first-year annual management fee of 0.38 percent to be paid monthly.

“In the current low interest-rate environment, covered bonds offer attractive risk-adjusted yields and are potentially a compelling alternative to broad European government bonds, as the asset class has historically provided higher returns with lower volatility and lower sensitivity to changes in market yield levels,” Mierau said in the statement.

Covered bonds, which were pioneered in 18th-century Prussia, are backed by mortgages and public sector loans. The debt returned 3.7 percent in 2013 compared with 2.3 percent for European sovereign debt, according to Bank of America Merrill Lynch index data.

(Bloomberg News)

  @IN Wire

Apr 19 04:10PM
24 Books You?ve Never Heard Of But Will Change Your Life http://t.co/nTYkXVHpXx
Apr 19 12:35PM
SEC eyes new stock trade disclosure requirements http://t.co/ApKEyBjE6N

Career Center

Explore your opportunities and be informed for your next move.

Company Type
Firm Type
Clearing Firm
Presented by

Most Watched Video

7:12The 2 biggest factors driving growth in active ETFs

Ugo W. Egbunike Dir. Of Business Development, ETF.com Greg Crawford Deputy Editor, InvestmentNews

Video Spotlight
1:47People are Living Longer. Good News or Bad News?

Sponsored by Oppenheimer Funds Inc.