With Gross, Pimco adds star power to ETFs

Fund firm lists bond king as manager on new funds; can't hurt
MAY 07, 2013
By  JKEPHART
Pacific Investment Management Co. LLC has added bond guru Bill Gross as a co-manager to its three upcoming actively managed exchange-traded funds. He was added as a co-manager to the soon-to-be-launched Pimco Real Return, Diversified Income and Low-Duration ETFs in an updated filing with the Securities and Exchange Commission last week. Pimco filed the initial paperwork for the trio of ETFs in June without Mr. Gross' name attached to any of them. The three ETFs are similar to mutual funds that Pimco already offers, one of which he manages. Mr. Gross isn't a listed manager on the $24 billion Pimco Real Return Fund (PRTNX) or the $7.2 billion Pimco Diversified Income Fund (PDVAX). Those are managed by Mirah Worah and Curtis Mewbourne, respectively. Both will co-manage their respective strategies with Mr. Gross, but his addition isn't expected to change the strategies, said Tim Strauts, ETF analyst at Morningstar Inc. “It could help the products to have Bill Gross as a portfolio manager, but I don't think it really affects how the ETFs will be run,” he said. Mr. Gross is the portfolio manager of the $24.6 billion Pimco Low Duration Fund (PTLAX). He will be joined by Marc Seidner on the ETF version. Each of the three ETFs will be cheaper than the retail shares of their respective mutual fund counterparts but more expensive than the institutional share classes, similar to the pricing strategy of the $5 billion Pimco Total Return ETF (BOND). “They think they've found the sweet spot for ETF pricing,” Mr. Strauts said. Even though the ETFs will be run by the same management teams as the funds, don't expect the performance of the two to be similar. As the Pimco Total Return ETF has shown, the same manager doesn't mean the same results. The ETF version of Pimco's flagship total-return strategy, managed by Mr. Gross, had a return of 10.5% over the 12-month period through April 19. The mutual fund version had a return of 7.13% over the same period. [email protected] Twitter: @jasonkephart

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.