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September 01, 2008 at 04:00 AM
Pacific Investment Management Co.’s (Pimco) reputation as a shrewd bond fund manager has served the company well. Soon, everyone will learn if that reputation can help it succeed in the burgeoning exchange-traded fund business.
The Newport Beach, Calif.-based fund manager has filed an application with the Securities and Exchange Commission to introduce an active bond ETF. If approved, the fund could serve as a model for future bond ETFs.
The ETF fixed-income category is still relatively small and is limited to products linked to indexes. According to ETFguide.com, there are just 63 bond products. By comparison, there are more than 640 equity based products.
In the bond arena, the Bear Stearns Current Yield Fund (YYY) is the only actively managed ETF. The fund invests in short-term debt obligations, such as foreign corporate debt, mortgage-backed securities, and U.S. government securities. The fund was launched by the ill-fated Bear Stearns during the spring and currently has just over $50 million in assets.
