PIMCO ETFs - Our Approach - Overview

Our Approach

Print   

 

Approach

PIMCO’s ETF management team, made up of senior portfolio managers and analysts, applies our quantitative expertise in replicating index returns, minimizing tracking error and using a highly efficient portfolio that looks to achieve the desired results. Our approach to managing portfolios is characterized by:

  • Extensive experience in using an optimal mix of securities to match the risk profile and return of market indexes
  • Index replication based on risk factors, which helps to ensure that the portfolio matches key attributes of the index
  • Proprietary risk management systems that employ sophisticated techniques that are designed to reduce tracking error
  • Trade execution that benefits from our long-established trading relationships, global presence and disciplined approach

Together, these attributes can result in ETFs that accurately represent a benchmark to a greater extent than could be achieved through a simple sampling of securities. We believe this approach can minimize tracking error, especially in extreme market environments where even slight deviations may magnify return disparities. This is particularly important for ETFs, as PIMCO’s experience and expertise in bond management provide a solid foundation for robust secondary market trading.

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus, which may be obtained by contacting your PIMCO representative or by clicking HERE. Please read the prospectus carefully before you invest or send money.

Investing in the bond market is subject to certain risks including the risk that fixed income securities will decline in value because of changes in interest rates; the risk that fund shares could trade at prices other than the net asset value; and the risk that the manager's investment decisions might not produce the desired results.  

Shares of the fund are not individually redeemable and shares may only be acquired from and redeemed by the fund in Creation Units. Investors may sell or purchase individual shares in secondary market transactions that do not involve the ETF. Shares of the Funds are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Please see the prospectus for more details.

Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the fund. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield, and NAV will fluctuate with changes in market conditions. Investment policies, management fees and other information can be found in the individual ETF’s prospectus.

ETFs are subject to secondary market trading risks. Shares of the Fund will be listed for trading on an exchange, however, there can be no guarantee that an active trading market for such shares will develop or continue. There can be no guarantee that the Fund’s exchange listing or ability to trade its shares will continue or remain unchanged. Shares of the Fund may trade on an exchange at prices at, above or below their most recent NAV. The per share NAV of the Fund is calculated at the end of each business day, and fluctuates with changes in the market value of the Fund’s holdings. The trading prices of the Fund’s shares fluctuate continuously throughout the trading day based on market supply and demand, which may not correlate to NAV. The trading prices of the Fund’s shares may differ significantly from NAV during periods of market volatility, which may, among other factors, lead to the Fund’s shares trading at a premium or discount to NAV.