Pimco creates new exchange-traded fund covering investment-grade bonds

By Devika Patel

Knoxville, Tenn., Sept. 21 - Pimco said in a press release that it has launched the Pimco Investment Grade Corporate Bond index fund.

The new exchange-traded fund seeks to track its benchmark index with an optimized exposure to investment-grade U.S. corporate debt issues that are primarily component securities of the benchmark. Pimco's proprietary optimization process seeks to avoid those securities that the firm believes may be hard to trade or deemed to have the highest risk of credit loss.

The fund is managed by managing director Vineer Bhansali and provides exposure to investment-grade corporate bonds that are primarily component securities of the Bank of America Merrill Lynch U.S. Corporate index, while also seeking to closely match the index duration, curve and credit characteristics.

The fund seeks to optimize trade execution, reduce transaction costs and minimize tracking error by avoiding bonds that are hard to obtain or at high risk of near-term default, while emphasizing bonds that may provide liquidity and market access.

Pimco also launched the Pimco Build America Bond Strategy Fund, which offers access to taxable municipal bonds issued under the Build America Bonds program.

"These new funds broaden investor access to two important fixed income areas - Build America Bonds and investment-grade corporate bonds - using the efficient, transparent exchange-traded fund format," managing director and head of Pimco's global exchange-traded fund business Tammie Arnold said in a press release.

"As with all Pimco investment products, our exchange-traded funds benefit from Pimco's nearly four decades of investment management experience, strong analytics and risk management expertise."

Pimco is a fixed-income fund-management company based in Newport Beach, Calif.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.