on Tuesday took the wraps off a fund that will invest solely in long-dated high-grade corporate bonds. The launch of Long-Term Credit
, which is aimed at institutional and high net worth investors and comes with annual operating expenses of 56 basis points, is the focus of Thursday's
Wall Street Journal Fund Track column
by Ian Salisbury.
The existing long-term fund in Pimco's lineup, Long Duration Total Return
, has holdings split between corporate and government debt.
Long-term corporate bonds yield about 7.8 percent, versus about 3.5 percent for long-term Treasurys, Salisbury noted, citing former Lehman Brothers bond indexes now published by Barclays. The gap between the two rates has historically
been about 1.3 percent, according to Pimco.
"You're getting what many in today's market would consider equity-like returns," Jim Moore
, product manager of the Pimco fund, was quoted in the article as saying.
Similar funds in the market include Vanguard Long-Term Investment-Grade Fund
and T. Rowe Price Corporate Income Fund
. The two focus on long-term corporate bonds, though they can also hold other assets.
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