Actively Managed Income ETFs

Actively managed ETFs seem to make the headlines now on a daily basis with more major players attempting to jump in the game. MarketWatch had this to say in “Pimco’s Active ETFs:”

Pimco has actively-managed mutual funds that seek to outperform a given index or benchmark by either having higher returns or by obtaining similar returns at lower risk. Now, Pimco has launched a series of exchange traded funds that are also actively-managed.

PIMCO Enhanced Short Maturity Strategy Fund (MINT):

PIMCO Enhanced Short Maturity Strategy Fund (MINT) is an actively managed exchange-traded fund (ETF) that seeks greater income and total return potential than money market funds, and may be appropriate for non-immediate cash allocations. MINT will primarily invest in short duration investment grade debt securities. The average portfolio duration of MINT will vary based on PIMCO’s economic forecasts and active investment process decisions, and will not normally exceed one year. MINT will disclose all portfolio holdings on a daily basis, and will not use options, futures, or swaps.

This is not a money market fund substitute for anyone needing ready access to their cash, but it is interesting alternative as a place to park cash and earn a bit better return. With an effective maturity of less than one year, it should have low volatility.

The second active ETF (MUNI) is a tax exempt bond portfolio, described by Pimco this way:

PIMCO Intermediate Muncipal Bond Strategy Fund (MUNI):

The Intermediate Municipal Bond Strategy Fund is an actively managed exchange-traded fund (ETF). Designed to be appropriate for investors seeking tax-exempt income, the Fund consists of a diversified portfolio of primarily intermediate duration, high credit quality bonds, which carry interest income that is exempt from federal tax and in some cases state tax. With this Fund, investors will see the names of the bonds owned daily. In addition, the Fund will not use options, futures or swaps.

I was puttering around on the Pimco web site looking for more information and eventually I made my way to a fairly new Pimco site exclusively for its ETFs. In addition to these active ETFs, Pimco has seven index ETFs that are covered on the Pimco ETF web site.

MINT has been trading since mid November 09 while MUNI has been offered since the middle of December. The ETFs are still trying to establish themselves and have low trading volumes. MUNI sports an average daily volume of 5,000 shares, while MINT does much better with 18,000 shares.

Still, much more time is needed (about 9 months) to observe price action and track trends, before I am willing to add these newbies to my database so that they can be featured in the weekly StatSheet.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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