Gross' Total Return ETF to charge hiked fee

Gross' Total Return ETF to charge hiked fee
Annual levy for exchange-traded fund will be 0.55%, while fee for namesake mutual fund is 0.46%
JUL 05, 2011
By  John Goff
Pacific Investment Management Co.'s first active exchange-traded fund to be run by Bill Gross will charge annual fees of 0.55 percent, as the firm seeks to expand in the fastest-growing industry segment. Pimco disclosed the cost for the Pimco Total Return Exchange-Traded Fund in a filing today with the U.S. Securities and Exchange Commission. Newport Beach, California-based Pimco said in April it planned an ETF that will follow a strategy similar to Gross's top-ranked $242.8 billion Total Return bond mutual fund. The institutional share class of the mutual fund carries an expense ratio of 0.46 percent. Gross, 67, is the most prominent fund manager to offer his investment strategy in an ETF format. Total Return, the world's largest mutual fund, has climbed an average of 9 percent annually in the past five years to beat 99 percent of peers, according to data compiled by Bloomberg. Pimco, which is diversifying beyond bond mutual funds under Chief Executive Officer Mohamed El-Erian, pushed into ETFs two years ago. ETF assets have surged more than 10-fold since 2001 to more than $1 trillion as of May, according to Washington-based Investment Company Institute. The funds hold baskets of securities while trading throughout the day like stocks. Actively run versions seek to combine the skill of a manager selecting investments with the trading flexibility, lower fees and tax advantages of ETFs, which typically track an index. No Derivatives Unlike the Total Return mutual fund, which uses a combination of options, futures and swap agreements, Gross's ETF cannot invest in such derivatives. The SEC said in March 2010 it wouldn't approve new ETFs that make significant use of derivatives, pending a review of the practice that is still ongoing. Should the SEC lift the freeze, the Total Return ETF would invest in derivatives, Pimco said in its April filing. Pimco manages about $3.2 billion in 17 ETFs, including four that are actively managed. Expense ratios for Pimco's four actively managed ETFs range from 0.35 percent to 0.45 percent, according to the firm's website. Pimco Total Return Exchange-Traded Fund will trade under the ticker symbol TRXT, the firm said in April. --Bloomberg News--

Latest News

401(k) savings rate at new record high but balances are down slightly
401(k) savings rate at new record high but balances are down slightly

Quarterly analysis of retirement accounts highlights positive behavior.

JPMorgan mulls new asset lending scheme aimed at crypto ETF investors
JPMorgan mulls new asset lending scheme aimed at crypto ETF investors

Insiders say the Wall Street giant is looking to let clients count certain crypto holdings as collateral or, in some cases, assets in their overall net worth.

Fintech bytes: Future Capital adds RayJay alum to C-suite, Advyzon welcomes ex-Envestnet leader
Fintech bytes: Future Capital adds RayJay alum to C-suite, Advyzon welcomes ex-Envestnet leader

The two wealth tech firms are bolstering their leadership as they take differing paths towards growth and improved advisor services.

UBS 'wrongfully' fired Idaho advisor in 2021: FINRA panel
UBS 'wrongfully' fired Idaho advisor in 2021: FINRA panel

“We think this happened because of Anderson’s age and that he was possibly leaving,” said the advisor’s attorney.

Cetera Trust hires Fidelity vet Kerri Scharr for chief fiduciary officer role
Cetera Trust hires Fidelity vet Kerri Scharr for chief fiduciary officer role

The newly appointed leader will be responsible for overseeing fiduciary governance, regulatory compliance, and risk management at Cetera's trust services company.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.