Drum roll, please.

The long-awaited launch of an exchange-traded fund by a certifiable investing rock star is nigh.

The Total Return Exchange-Traded Fund (ticker TRXT) is scheduled to list on March 1, according to Pacific Investment Management Co., best known as PIMCO.

PIMCO, of course, is home to famed investor Bill Gross, who is the scion of the largest mutual fund in the world. This, of course, is ... the PIMCO Total Return Fund, with $241.5 billion in total assets.

"We're looking forward to the development of an array of ETFs, from the standpoint of PIMCO," Gross said on the ETF Virtual Summit last Tuesday. The cornerstone? The PIMCO Total Return Exchange-Traded Fund, which "we hope will be the biggest as well."

The Total Return Fund, which invests in high-quality bonds, has been a darling for investors over the last quarter century.

If you had put $10,000 into the fund on its inception date, May 11, 1987, you would have seen its value grow to $69,735 just after Thanksgiving.

Since inception, the fund has grown in value 8.2%, every year. In the past three years? 9.6%, per annum. Mite a bit better than U.S. Treasury bonds, of any duration.

But, in 2011, only 1.8%. Investors ran to the doors, pulling out $5 billion, by Morningstar's count.

Meanwhile, PIMCO found itself sitting on the best-performing ETF, in 2011.

This would be the 25-year zero coupon U.S. Treasury exchange-traded bond fund with symbol ZROZ. If you had bet on it one year ago, you would have gained 51.9% on the investment.

Of course, only $64.9 million is invested in ZROZ. By contrast, the $241.5 billion held in the Total Return Fund is equal to 22.7% of the $1,060.2 billion held in exchange-traded funds in toto at the end of 2011.

The Total Return ETF is expected to be an actively managed fund.

Until about five years ago, that would have flown in the face of what an exchange-traded fund was meant to be.

The salient difference between a mutual fund and an exchange-traded fund is that the latter, of course, can be traded on a stock exchange. At any time during a trading session. Mutual funds only figured out what they are worth, at the end of each day.

But the bread-and-butter characteristic of an exchange-traded fund was that it allowed investors to pick a given sector of the economy or a particular index of stock market performance and sit back and relax. The components of the fund would automatically and passively match the composition and performance of the index.

Not so, any longer. The next iteration of ETFs is to move into "active" management. Bring in rules or bring in the human intelligence to get alpha. To find stocks that outperform a given index and provide investors with above-average returns.

That is where Gross and the Total Return ETF come in. To applause, from other proponents of actively managed funds, traded on exchanges.

"People have asked me, are you nervous about competing with PIMCO? And I say, let's get it straight, we're not even close to competing with PIMCO," said Noah Hamman, chief executive officer of AdvisorShares, of Bethesda, Md., which markets actively managed exchanged-traded funds that focus on international stocks with strong growth prospects.

PIMCO'S entry into actively managing the pieces of ETFs, will bring "a lot of attention" to such funds, Hamman said.

Pacific Investment is "smart and talented" and will be ready to invest $10 million or more into the field. "With that eight-figure marketing budget they have, they're going to educate like crazy on ETFs and particularly on actively managed ETFs," Hamman said. "So that's going to be huge."

The Total Return ETF will not be allowed to invest in futures, options and other derivatives. And it won't exactly replicate the approach of the Total Return Fund, in its choices. A maximum of 65% of its holdings can be in bonds, Gross' strong suit.

But the Total Return ETF will put a stamp of legitimacy on the idea of applying strong stock-picking skills to the choice of components, every day, in exchange-traded funds.

"I think it'll continue to open it up" to the opening of more actively managed funds, Hamman said. When PIMCO "puts a stake in the ground," everyone else, from Vanguard Group on down, will take notice. "That's going to turn some heads," he said.

Based on regulatory filings in 2011, PIMCO has indicated that the ETF version of Gross' Total Return Fund will have an annual expense ratio of 0.55% of assets. That's 40 basis points below that of the mutual fund version.

The ETF will trade on NYSE Arca, the all-electronic exchange operated by the New York Stock Exchange, using the symbol TRXT. Like AdvisorShares' funds, holdings in the Total Return ETF will be disclosed daily, for full 'transparency' to investors.

AdvisorShares uses humans to pick stocks and outperform benchmarks with its picks.

The firm has guidelines that focus its picks, such as stocks in foreign countries of companies with a market worth of $3.5 billion or more and a high return on invested capital over a long period of time.

But it's not using rule-based choices for its approach to actively managing its exchange-traded funds. Quantshares, by comparison, automates active management by calculating the spreads that can be generated by betting long on stocks in a given category that can be expected to generate above-average returns and to short those that won't.

In a fund investing in "quality" stocks, that means betting long on securities across many sectors that have high returns on equity and low debt-to-equity ratios and shorting the converse.

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