Pimco announces plans for two new investment-grade fixed-income funds

By Toni Weeks

San Luis Obispo, Calif., June 17 – Pimco ETF Trust announced in an N-1A filing with the Securities and Exchange Commission its plan to offer two new fixed-income funds that target investment-grade securities.

The Pimco Investment Grade Floating Rate Bond Active Exchange-Traded Fund and the Pimco Low Duration Investment Grade Corporate Bond Active Exchange-Traded Fund will both seek to maximize total return, consistent with prudent investment management.

The floating-rate bond fund will normally invest at least 80% of its assets in a diversified portfolio of investment-grade floating- or adjustable-rate fixed-income instruments, which may be represented by forwards or derivations such as options, futures contracts or swap agreements, that effectively enable the fund to achieve a floating rate of income. The fund will invest primarily in investment-grade securities but may invest up to 20% of its total assets in high-yield securities rated below BBB- by Standard & Poor’s.

The corporate bond fund will normally invest at least 80% of its assets in a diversified portfolio of investment-grade corporate fixed-income instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements. The fund will invest primarily in investment-grade securities but may invest up to 15% of its total assets in high-yield securities rated below BBB- by S&P. The average portfolio duration, a measure of the sensitivity of a security’s price to changes in interest rates, will vary from zero to four years.

The portfolio manager has not yet been named.

Likewise, management fees and total annual fund operating expenses have not yet been determined.

Newport Beach, Calif.-based Pacific Investment Management Co. LLC, or Pimco, will serve as the funds’ investment adviser.

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