PIMCO announced plans to close down four of its ETFs, with September 26, 2014 slated to be the last day of trading. The funds are expected to liquidate by October 1, but we recommend that shareholders dispose of any holdings prior to the delisting to avoid any surprises. These funds are thinly traded and illiquid, so we advise owners to use limit orders and take other precautions when selling their shares.
The four affected ETFs, and their asset levels prior to the announcement, are:
- PIMCO Australia Bond Index ETF (AUD), $22.7 million
- PIMCO Canada Bond Index ETF (CAD), $17.6 million
- PIMCO Germany Bond Index ETF (BUND), $3.2 million
- PIMCO Build America Bond ETF (BABZ), $23.9 million
These are not the first closures for PIMCO, which shut down the PIMCO Broad U.S. Treasury Index ETF (former ticker TRSY) in March. However, the impending closure of PIMCO Build America Bond ETF (BABZ) marks the firm’s first closure of an actively managed ETF.
The four ETFs have combined assets of more than $67 million. While not a large amount, it is significantly greater than the approximately $11 million invested in the four ALPS|Goldman Sachs ETFs shuttered last week. These closures leave PIMCO with seventeen ETFs, including two with asset levels below some of the funds targeted for closure. PIMCO Foreign Currency Strategy (FORX) with $21 million and PIMCO 3-7 Year U.S. Treasury Index (FIVZ) with $13 million will remain open for now, suggesting PIMCO’s decision making process consists of more than just asset levels.
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.