PIMCO is planning to launch a Total Return bond exchange-traded fund that will be managed by Bill Gross and disclose its holdings daily rather than monthly, a filing with the Securities and Exchange Commission shows.
“We have advocated for an [ETF of Total Return] under the argument that the fees for retail investors could be lower, the tax efficiency could be higher and the fund distribution channel is open to all,” said Morningstar analyst Robert Goldsborough.
However, Goldsborough said it was not clear how closely the ETF will track the mutual fund since the registration statement said the ETF’s investments and returns “are not expected to be the same as those made by other funds for which PIMCO acts as an investment advisor.”
Goldsborough said: “Put another way, PIMCO is telling investors that the proposed ETF may be managed differently or trade after the mutual fund makes its trades. As a result, those investors who want to jump ship from [PIMCO Total Return] in search of a possibly lower fee from the ETF version may see different results.”