New PIMCO International Bond ETFs Lack Data

November 20, 2011 by  
Filed under Commentary, ETF IPOs (New ETFs)

PIMCO launched three international bond ETFs earlier this month.  All are designed to track long-standing Bank of American/Merrill Lynch indexes.

For unknown reasons, PIMCO chose not to share any historical index data with potential ETF shareholders.  This leaves prospective investors without yield, duration, composition, and other pertinent data with which to make an informed decision regarding these funds.

PIMCO Australia Bond Index Fund (AUD) seeks to replicate the performance of the BofA Merrill Lynch Diversified Australia Bond Index, which has been in existence for more than eleven years.  The underlying index is designed to track the performance of large, Australian dollar-denominated investment grade debt issued in Australia including Australian sovereign, quasi government, corporate, securitized, and collateralized securities.  Index constituents are capitalization-weighted and adjusted to meet issuer concentration limits.  PIMCO does not provide any index or fund characteristics such as yield, duration, or the allocations to corporate and government debt.  The ETF listed on 11/01/11, has 32 holdings, and has expenses capped at 0.45% (fund snapshot).

PIMCO Canada Bond Index Fund (CAD) seeks to replicate the performance of the BofA Merrill Lynch Diversified Canada Government Bond Index, which has been in existence for more than six years.  The underlying index is designed to track the performance of large, Canadian dollar-denominated investment grade debt issued in Canada of sovereign and quasi-government securities.  Index constituents are capitalization-weighted and adjusted to meet issuer concentration limits.  PIMCO does not provide any index or fund characteristics such as yield or duration.  The ETF listed on 11/10/11, has 26 holdings, and has expenses capped at 0.45% (fund snapshot).

PIMCO Germany Bond Index Fund (BUND) seeks to replicate the performance of the BofA Merrill Lynch Diversified Germany Bond Index, which has been in existence for nearly thirteen years.  The underlying index is designed to track the performance of large, Euro-denominated investment grade debt of German issuers, including sovereign, quasi-government, corporate, securitized, and collateralized securities.  Index constituents are capitalization-weighted and adjusted to meet issuer concentration limits.  PIMCO does not provide any index or fund characteristics such as yield, duration, or the allocations to corporate and government debt.  The ETF listed on 11/10/11, has 50 holdings, and has expenses capped at 0.45% (fund snapshot).

While the new funds all have similar names, their construction is quite different.  CAD, for instance, holds only government issued debt, while AUD and BUND hold investment grade corporate bonds in addition to government securities.

AUD will compete with the recently retargeted WisdomTree Australia & New Zealand Debt Fund (AUNZ).  AUNZ has 87% allocated to Australia, a yield above 4%, and a 0.45% expense ratio (AUNZ overview).

BUND will compete with the PowerShares DB German Bund Futures ETN (BUNL).  BUNL is an exchange-traded note with a 0.50% investor fee and does not issue dividend payments (BUNL overview).

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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