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PIMCO Launches ETF Replicating Its Flagship Total Return Fund

Tyler Durden's picture


And some more odd news out of Pimco, in which we learn that PIMCO which now has about $74 billion in excess cash, has decided to go ahead and take more investor cash without any direct investment ideas and launch an ETF. From Bloomberg: "Pacific Investment Management Co. plans to offer an exchange-traded fund managed by Bill Gross that will invest primarily in fixed-income securities. Pimco Total Return Exchange-Traded Fund will buy a combination of U.S. and non-U.S. public and corporate debt, the Newport Beach, California-based firm said in filing today with the U.S. Securities and Exchange Commission. The fund may hold as much as 10 percent of its assets in high-yield securities." According to preliminary data Pimco will hold up to 65% in government and corporate bonds. The biggest question: how big this ETF will be is still unanswered. As was first disclosed previously here, however, with the bigger fund negative Gov't debt right now, we wonder if the new ETF will merely whether replicate the larger fund's strategy or serve as a buyer of holdings from the larger fund when there is no other buyer in the market. Lastly, the whole point of having an ETF when anyone who wishes can buy the closed end fund, is just a little suspicious.


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Wed, 04/20/2011 - 11:42 | Link to Comment Forgiven
Forgiven's picture

It's build-your-own-Ponzi day!  Great.

Wed, 04/20/2011 - 12:15 | Link to Comment nkktwotwozero
nkktwotwozero's picture

>It's build-your-own-Ponzi day!  Great.

It's build-your-own Ponzi decade! HURRAY!




Wed, 04/20/2011 - 11:48 | Link to Comment firstdivision
firstdivision's picture

So he drove prices down to pick some up for this ETF.  Well played Bill.

Wed, 04/20/2011 - 16:42 | Link to Comment Weisbrot
Weisbrot's picture

he possibly expects the government to do "the right thing" as if that could happen.

Wed, 04/20/2011 - 11:52 | Link to Comment Let them all fail
Let them all fail's picture

you have the link?

Wed, 04/20/2011 - 11:58 | Link to Comment Mark McGoldrick
Mark McGoldrick's picture

This article has nothing to do with silver, so I don't know why it's posted.  

Compared to a silver article, I would expect the ratio of comments to be near 100:1, which is the historical average among metal/non-metal articles. 



Wed, 04/20/2011 - 12:06 | Link to Comment mayhem_korner
mayhem_korner's picture

Metals, my little green friend, are reflecting the market's sentiment on nearly everything else going on.

Wed, 04/20/2011 - 12:19 | Link to Comment nkktwotwozero
nkktwotwozero's picture

> are reflecting the market's sentiment 

That's what prices are.

But is the sentiment correct? Will it persist? Will it get greater or lesser?

These are the questions that make and break.


Wed, 04/20/2011 - 12:50 | Link to Comment mayhem_korner
mayhem_korner's picture

Do you have any substance offer, or do you just parachute in with randomly sequenced words?

Wed, 04/20/2011 - 11:58 | Link to Comment mayhem_korner
mayhem_korner's picture

This is like the scene in Braveheart, where the Scottish rebels hold their spears until the English cavalry is almost on top of them.  Carnage maximization.

Now that PIMCO's telegraphed a pathway back into buying Treasurys, Gross just waits until he gets to his yield targets. 

Does this set up for a Benny bribe or what?

Wed, 04/20/2011 - 12:00 | Link to Comment NotApplicable
NotApplicable's picture

But this is a shiny, new ETF, much sexier than those old, worn-out funds!

This reminds me of JPM's new silver vault, only in this case, it's a Pandora's Box for bonds.

Wed, 04/20/2011 - 12:04 | Link to Comment LawsofPhysics
LawsofPhysics's picture

PIMCO want a ponzi of their own.  Pure and simple.  It is either that or Benny had better start letting bond rates rise, period.

Wed, 04/20/2011 - 12:05 | Link to Comment No Bid
No Bid's picture

Another PIMCO bet on lower rates.  They really believe.

Wed, 04/20/2011 - 12:10 | Link to Comment JohnG
JohnG's picture

This sounds like a hedge on the closed end fund.

Bastard working both ends.

Wed, 04/20/2011 - 12:16 | Link to Comment Agent P
Agent P's picture

Just to clarify, the ETF is the closed end fund.  The traditional fund is an open end fund.

Wed, 04/20/2011 - 12:24 | Link to Comment JohnG
JohnG's picture

No creation units on the ETF??

Wed, 04/20/2011 - 12:43 | Link to Comment Agent P
Wed, 04/20/2011 - 12:46 | Link to Comment JohnG
JohnG's picture

Thanks.  I'll research this.  Don't like ETF's in general, dangerous imho.

Wed, 04/20/2011 - 12:37 | Link to Comment stitch-rock
stitch-rock's picture

PHK is a closed-end fund, no?

Wed, 04/20/2011 - 12:43 | Link to Comment Agent P
Agent P's picture

Yes, but that's not the Total Return fund (PTTRX, PTTDX).

Wed, 04/20/2011 - 12:10 | Link to Comment TooBearish
TooBearish's picture

PIMCO been selling VOL in FI last 10 days

Wed, 04/20/2011 - 12:13 | Link to Comment cossack55
cossack55's picture

"just a little suspiscious". Ah, Tyler, a master of the understatement.

Wed, 04/20/2011 - 12:12 | Link to Comment ivars
ivars's picture

I had correctly predicted increase in silver price growth speed here, in this March 13th graph.


But I made that prediction correctly based on consequent correction to 25-28 USD. Have i also predicted correction correctly ( that its coming soon) , and the level of correction price ( its 45 USD in the graph, could be of course even >50 USD in the peak as well as prices move very fast in superexponential growth region)?

We shall know in less than a 2 weeks.

The interesting thing is , stocks has to drop at the same time, as USD value will be somewhat temporarily restored vs. silver and also a bit vs. gold, but oil price should not change dramatically.

Is Iran going to do something stupid? I have no idea what could cause all these events simultaneously. Or some too big to fail bank may fail?

Wed, 04/20/2011 - 12:22 | Link to Comment buzzsaw99
buzzsaw99's picture

Gross just sold a bunch of Ts and now he is starting a fund to buy Ts? A retard could do his job.

Wed, 04/20/2011 - 12:42 | Link to Comment stitch-rock
stitch-rock's picture

If that retard had the timing of a particle-accelerator and balls of pure plutonium...

Typically, if "anyone" could do something, "everyone" would

Wed, 04/20/2011 - 13:09 | Link to Comment Silver Bug
Silver Bug's picture

Hopefully this isn't just a dumping ground.

Wed, 04/20/2011 - 13:25 | Link to Comment Breaker
Breaker's picture

If I recall correctly, PTTRX requires a $100,000 minimum investment. An ETF would allow smaller investors who believe in PIMCO's strategy to participate.

Wed, 04/20/2011 - 13:25 | Link to Comment catch edge ghost
catch edge ghost's picture

It would seem less suspicious if you knew that the coming Social Security reform in a few years will transform every man, woman, and child in the US into an ETF investor.

Wed, 04/20/2011 - 16:52 | Link to Comment Downtoolong
Downtoolong's picture

So, I guess Bill Gross believes that if you take something with no special value or advantage in the market, it gets better when you start trading the shit out of it. No wonder Wall Street loves him.


Wed, 04/20/2011 - 17:43 | Link to Comment Augustus
Augustus's picture

Aren't the relevant tickers PSOCX for the open end fund and PGP for a closed end fund selling at the huge premium?

Wed, 04/20/2011 - 21:33 | Link to Comment Sherman McCoy
Sherman McCoy's picture

nothing suspicious. There's a 3% entrance fee on the retail(PTTAX) version of the fund. Maybe you should do a little homework before writing?

Wed, 04/20/2011 - 22:19 | Link to Comment prophet
prophet's picture

1. That would be open-end.

2. Ever heard of Vanguard?

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