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New ETF Offerings: PIMCO and Vanguard Get Active
September 23, 2010
SAN DIEGO (ETFguide.com) – Fund giants PIMCO and Vanguard have expanded their ETF lineups.
Vanguard introduced seven ETFs linked to popular Russell U.S. stock indexes. The Vanguard ETFs following the Russell 3000 cover the broader U.S. stock market. The funds linked to the Russell 2000 and the Russell 1000 track small and large company stocks respectively.
Vanguard also introduced Russell ETFs that will select growth and value stocks within the Russell 1000 and Russell 2000.
“Russell benchmarks are well-constructed and well-recognized, and meet Vanguard’s ‘best practice’ standards for index construction. Institutional investors, consultants, financial advisors, and others with a preference for Russell indexes now have low-cost Vanguard options to consider,” said Vanguard Chairman and CEO Bill McNabb.
The Vanguard Russell ETFs, according to Morningstar data, will have an average expense ratio of 0.16% which is lower than the 0.23% average expense ratio of competing ETFs.
In related news, PIMCO launched the PIMCO Build America Bond Strategy Fund (NYSEArca: BABZ) and the PIMCO Investment Grade Corporate Bond Index Fund (NYSEArca: CORP).
BABZ is an actively managed ETF offering access to taxable municipal bonds issued under the Build America Bonds (BABs) program. The fund aims for attractive yield opportunities in this municipal bond sector while also avoiding securities from municipalities that PIMCO believes face deteriorating credit quality. The fund is managed by John Cummings, executive vice president and head of PIMCO’s municipal bond desk.
CORP provides exposure to investment-grade corporate bonds that are primarily component securities of the BofA Merrill Lynch US Corporate Index. The fund seeks 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 that may provide liquidity and market access. The fund is managed by Vineer Bhansali, managing director.
“These new funds broaden investor access to two important fixed income areas – Build America Bonds and investment-grade corporate bonds – using the efficient, transparent ETF format,” said Tammie Arnold, managing director and head of PIMCO’s global ETF business. “As with all PIMCO investment products, our ETFs benefit from PIMCO’s nearly four decades of investment management experience, strong analytics and risk management expertise.”
The Vanguard Russell ETFs debuted on September 22nd while the PIMCO ETFs launched on September 20th.
New PIMCO and Vanguard ETFs with Expense Ratios Listed Below
--Vanguard Russell 3000 ETF (NYSEArca: VTHR) - 0.15%
--Vanguard Russell 1000 ETF (NYSEArca: VONE) - 0.12%
--Vanguard Russell 1000 Growth ETF (NYSEArca: VONG) - 0.15%
--Vanguard Russell 1000 Value ETF (NYSEArca: VONV) - 0.15%
--Vanguard Russell 2000 ETF (NYSEArca: VTWO) - 0.15%
--Vanguard Russell 2000 Growth ETF (NYSEArca: VTWG) - 0.20%
--Vanguard Russell 2000 Value ETF (NYSEArca: VTWV) - 0.20%
--PIMCO Build America Bond Strategy Fund (NYSEArca: BABZ) - 0.45%
--PIMCO Investment Grade Corporate Bond Index Fund (NYSEArca: CORP) - 0.20% |
