Pimco launches Australia index ETF; Canada, Germany ETFs to follow

By Toni Weeks

San Diego, Nov. 1 - Pimco announced it has launched the Australia Bond index fund, the first of three new country index exchange-traded funds.

The company will soon launch the Pimco Canada Bond index fund and the Pimco Germany Bond index fund.

The ETFs are designed to enable investors to capitalize on opportunities within three countries whose balance sheets and debt dynamics are currently well positioned to navigate the downside effects of slower global growth and ongoing national and personal deleveraging.

According to a Pimco press release, the three countries currently have some of the strongest balance sheets among developed nations. Australia, one of the largest exporters of commodities and an important trading partner with emerging markets in Asia, has one of the higher-yielding currencies. Canada is one of the largest exporters of agricultural products, raw materials and oil and historically has a low debt burden, growing economy and prudent fiscal management. Germany, having navigated the financial crisis, is the world's second largest exporter and the largest economy in Europe.

"These new index ETFs are designed to help investors access select countries that may offer better risk-adjusted returns in this 'new normal' environment," Tammie Arnold, managing director and global head of the firm's ETF business, said in the release. "With ETFs, investors may benefit from convenient access to Pimco's capabilities as well as the portfolio transparency and intra-day pricing attributes of the ETF vehicle."

The Pimco Australia Bond index fund will trade under the ticker "AUD" and will be managed by Rob Mead, head of Australian portfolio management. The Pimco Canada Bond index fund will trade under the ticker "CAD" and will be managed by Ed Devlin, head of Canadian portfolio management. The Pimco Germany Bond index fund will trade under the ticker "BUND" and will be managed by Lorenzo Pagani, head of Pimco's European government bond and rates desk.

All three ETFs offer exposure to government-issued debt instruments as well as investment-grade credit issues in Germany and Australia. The funds seek to optimize trade execution, reduce transaction costs and minimize tracking error by avoiding bonds that are hard to obtain or are at high risk of near-term default, and they emphasize bonds that may provide liquidity and market access.

Pimco, a global investment management firm, is based in Newport Beach, Calif.

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