Pacific Investment Management Company (Pimco) has unveiled an actively managed ETF on the NYSE Arca platform.
The Enhanced Short Maturity Strategy fund is designed to protect capital while seeking yields higher than those earned from money market funds.
In order to achieve this, the ETF primarily invests in short duration investment grade debt securities, as well as longer maturity bonds and short-term instruments similar to money markets.
The fund is managed by Pimco executive vice president and deputy head of the money market desk Jerome Schneider. He says: "Investors are holding a lot of cash, and are compelled to look for something beyond the near-zero yields that money market funds offer."
The firm will use a top-down strategy to determine what forces will likely influence the economy and financial markets, and a bottom-up strategy to identify potentially undervalued securities for selection.
The ETF is benchmarked to the Citigroup 3-Month Treasury Bill index, which represents monthly equivalents of yield averages of the last three-month treasury bill issues.
Pimco says the average portfolio duration of the ETF will vary depending on the firm's economic forecasts and active investment decisions, although it will not normally exceed one year.
The fund, which has a management fee of 0.35%, discloses holdings on a daily basis and does not include options, futures or swaps.
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