PIMCO to launch ETF version of Gross fund this March

PIMCO has confirmed it will launch a low-cost tracker version of the PIMCO Total Return fund for US investors on 1 March.

Managed by Gross for US investors, the exchange-traded version of the world's largest bond fund will invest in the same diversified portfolio of bonds as PIMCO Total Return, with maturities averaging around five years.

PIMCO expects the fund will have an expense ratio of 0.55% for US investors, as opposed to the existing fund's 0.9% plus ‘sales load'. The company had initially revealed it was planning the ETF in a regulatory filing made in April 2011.

The ETF will be able to invest up to 10% of assets in high yield bonds, up to 30% in foreign currency debt, and up to 10% in preferred stock, convertibles or other equity-related securities.

The Total Return fund's performance suffered last year as a result of Gross' well-publicised negative view on US government-related debt, which later softened. The portfolio saw outflows over the year as a whole but remains the world's largest at $244bn in size.

A spokesman for PIMCO would not comment on the possibility of the ETF offering being made available to UK or European investors in the future.

Separately, PIMCO has launched two global equity income funds to European investors via its Dublin-domiciled Global Investor Series range.

Managed by Brad Kinkelaar and Cliff Remily, the PIMCO EqS Dividend fund will focus on equity investments, while the PIMCO Dividend and Income Builder fund will also invest in fixed income securities.