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PIMCO Debuts Australia Bond ETF
November 1, 2011
PIMCO launched the first of three new bond exchange-traded funds (ETFs) targeting individual countries. The PIMCO Australia Bond Index Fund (NYSEArca: AUD) was introduced for trading and it will follow investment grade debt from Australia.
AUD is linked to the performance and yield of the BofA Merrill Lynch Diversified Australia Bond Index. The bond benchmark tracks Australian dollar denominated investment grade bonds from publicly issued in the Australian domestic market, including sovereign, corporate, securitized, and collateralized securities.
As of September 30, 2011, there were 212 issues in AUD’s underlying index. Qualifying index constituents must have an investment grade rating.
AUD charges net annual expenses of 0.45%.
PIMCO is planning to launch the PIMCO Canada Bond Index Fund and the PIMCO Germany Bond Index Fund soon.
Australia (NYSEArca: EWA), Canada (NYSEArca: EWC), and Germany (NYSEArca: EWG) currently have some of the strongest balance sheets among developed nations (NYSEArca: EFA).
Australia has been and remains one of the largest exporters of commodities (NYSEArca: GCC) and serves as an important trading partner with emerging markets in Asia (NYSEArca: GMF). 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 (NYSEArca: DBA), raw materials and oil (NYSEArca: USO) and has historically had a low debt burden, a growing economy and prudent fiscal management.
“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.”
PowerShares Waives Fees
In related ETF news, Invesco PowerShares waived fees on four of its KBW linked financial ETFs. The portfolios provide investors with targeted access to the bank, capital markets and insurance sectors. The fee waivers are good through February 1, 2012.
The ETFs impacted by the temporary fee waivers are as follows:
--PowerShares KBW Bank Portfolio (NYSEArca: KBWB)
--PowerShares KBW Capital Markets Portfolio (NYSEArca: KBWC)
--PowerShares KBW Insurance Portfolio (NYSEArca: KBWI)
--PowerShares KBW Regional Banking Portfolio (NYSEArca: KBWR) |
