Although actively managing Treasuries has always proven difficult,
In a recent research report, PIMCO says TIPS, which comprise just $532 billion, or 8% of the $6.6 trillion Treasury market, behave differently than other Treasuries. The fund giant, which oversees $840 billion in assets under management, may have released the report since the iShares Barclays TIPS ETF has attracted $5.9 billion in sales this year alone.
Meanwhile, PIMCO has filed to launch its own TIPS ETFs.
PIMCO argues that because traditional and TIPS indexes adjust their daily value according to prices at the end of the day’s close, other investors can come in to buy the stocks, which can drive up prices. In addition, PIMCO argues that with TIPS auctions scheduled for only eight times a year, active investors can take advantage of supply and demand.
Surprisingly,
But
ETF managers can see market anomalies that are cost investors money and adjust for them, Tucker said.