ETFs

Outperforming Pimco Total Return ETF switches up ticker

The Pimco Total Return ETF is getting a new ticker symbol April 4.

Less than a month after its launch, the Pimco Total Return ETF (TRXT) is getting a new ticker symbol. Pacific Investment Management Co. LLC announced today that it is changing the ticker symbol of the ETF to BOND, effective April 4.
“Our aim is to enable investors to access the Pimco Total Return ETF easily and conveniently, and we believe that renaming the NYSE ticker to BOND is another step toward achieving that objective,” Bill Gross, the fund’s portfolio manager and co-chief investment officer of Pimco, said in a news release.
The Pimco Total Return ETF has grown to more than $250 million in assets since its March 1 launch. It was the most anticipated launch of an actively managed ETF, thanks to the star power of Mr. Gross and its attachment to the largest mutual fund in the world, the $250 billion Pimco Total Return Fund (PTTAX).
Mr. Gross also helped stoke the fanfare by declaring he expected the ETF version to follow in the mutual fund’s footsteps and become the largest in the world.
Actively managed ETFs thus far have failed to generate much interest among investors, and both investors and industry figures alike are watching the Pimco Total Return ETF to see if it can break that trend.
So far, the ETF has lived up to its reputation. While 26 days doesn’t make a track record, the Pimco Total Return ETF has outperformed the Barclays Aggregate Bond Index by 1.7% since its launch. It’s even outperformed the mutual fund version of Pimco Total Return by 1.5%.
The difference in performance between the ETF and mutual fund versions was expected, though no one could’ve been sure how much the two strategies would differ or which would perform better. The reason for the divergence in performance is that the mutual fund version is allowed to use derivatives — and does so — while the ETF version is not.
The Securities and Exchange Commission issued a moratorium on ETFs using derivatives in 2010 while it further researched the area.
The moratorium still hasn’t been lifted, and last week at the Investment Company Institute’s Mutual Fund and Investment Management Conference, Eileen Rominger, director of investment management at the SEC, hinted that there is no end to the moratorium in sight.