Pimco Takes ETF-ophiles to Australia, Canada and Germany
Reported by Neil Anderson, Managing Editor
Pimco's [see profile] now bringing overseas bond markets to U.S. exchange-traded fund users. Today the Newport Beach, California-based mutual fund firm and Allianz subsidiary launched the Pimco Australia Bond Index Fund and confirmed plans to launch its Canada Bond Index and Germany Bond Index funds soon, too.
"These new index ETFs are designed to help investors access select countries that may offer better risk-adjusted returns in this New Normal environment," stated Tammie Arnold, managing director and global head of Pimco's ETF business.
Australian PM chief Rob Mead PMs the Australia ETF. Canadian PM chief Ed Devlin will PM the Canada ETF, and European government bond and rates desk chief Lorzeno Pagani will PM the Germany ETF.
Company Press Release
NEWPORT BEACH, CA--(November 01, 2011) - PIMCO, a leading global investment management firm, has launched the first of three new country index exchange traded funds, the PIMCO Australia Bond Index Fund, and will soon launch the PIMCO Canada Bond Index Fund and the PIMCO Germany Bond Index Fund. These ETFs are designed to enable investors to capitalize on opportunities within three countries whose balance sheets and debt dynamics are currently well positioned to navigate the downside effects of slower global growth and ongoing national and personal deleveraging.
Australia, Canada and Germany currently have some of the strongest balance sheets among developed nations thanks to both internal and external factors. Australia has been and remains one of the largest exporters of commodities and serves as an important trading partner with emerging markets in Asia. It's also currently one of the higher-yielding currencies in both the developed and developing world. Canada is one of the largest exporters of agricultural products, raw materials and oil and has historically had a low debt burden, a growing economy and prudent fiscal management. Germany appears to have deftly navigated the financial crisis and is the world's second largest exporter as well as the largest economy in Europe.
"These new index ETFs are designed to help investors access select countries that may offer better risk-adjusted returns in this New Normal environment, and benefit from PIMCO's trading and investment expertise in local markets," said Tammie Arnold, managing director and global head of the firm's ETF business. "With ETFs, investors may benefit from convenient access to PIMCO's capabilities as well as the portfolio transparency and intra-day pricing attributes of the ETF vehicle."
All three ETFs offer exposure to government issued debt instruments, as well as investment-grade credit issues in Germany and Australia. The funds seek to optimize trade execution, reduce transaction costs and minimize tracking error by avoiding bonds that are hard to obtain or at high risk of near-term default, while emphasizing bonds which may provide liquidity and market access.
The PIMCO Australia Bond Index Fund will trade under the ticker AUD and will be managed by Rob Mead, head of Australian portfolio management. The PIMCO Canada Bond Index Fund will trade under the ticker CAD and will be managed by Ed Devlin, head of Canadian portfolio management. The PIMCO Germany Bond Index Fund will trade under the ticker BUND and will be managed by Lorenzo Pagani, head of PIMCO's European government bond and rates desk.
PIMCO is a leading global investment management firm, with offices in 10 countries throughout North America, Europe and Asia. Founded in 1971, PIMCO offers a wide range of innovative solutions to help millions of investors worldwide meet their needs. Our goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline. PIMCO is owned by Allianz Global Investors, a subsidiary of the Munich-based Allianz S.E., a leading global diversified financial services provider.
Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the Fund's prospectus, which may be obtained by contacting your PIMCO representative. Please read the prospectus carefully before you invest or send money.
Exchange Traded Funds ("ETF") are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or "baskets" of shares. Shares of an ETF are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF's prospectus.
A word about risk: Past performance is not a guarantee or reliable indicator of future results. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield and Net Asset Value (NAV) will fluctuate with changes in market conditions. Investments may be worth more or less than the original cost when redeemed. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Sovereign securities are generally backed by the issuing government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. The Fund is non-diversified, which means that it may invest its assets in a smaller number of issuers than a diversified fund.
The value of fixed income securities contained in the fund can be impacted by changes in interest rates. Bonds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.
The Funds use an indexing approach and may be affected by a general decline in market segments or asset classes relating to their respective Underlying Index. The Funds invest in securities and instruments included in, or representative of, their respective Underlying Index regardless of the investment merits of the Underlying Index.
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Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statement.