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U.S. bond giant Pimco brings ETF offerings to Canada

The Pimco offices in Newport Beach, Calif.

© Mike Blake / Reuters/Reuters

Global fixed-income giant Pimco has joined the growing number of Canadian providers of exchange-traded funds as it expands its bond expertise into ETF offerings for investors through its Canadian operations.

Pimco Canada, popular among investors for its multiple bond strategies, introduced two actively managed bond ETFs to the Canadian marketplace on Monday, mirroring two of the company's most popular bond funds.

Pimco Monthly Income Fund (Canada) and Pimco Investment Grade Credit Fund (Canada) began trading on the Toronto Stock Exchange on Oct. 2.

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With the ticker PMIF, Pimco Monthly Income Fund (Canada) offers investors access to an actively managed bond portfolio that invests primarily in a diversified portfolio of non-Canadian-dollar fixed-income instruments of varying maturities. Similar to its mutual-fund version, the fund will be managed by Dan Ivascyn, managing director and group chief investment officer; and Alfred Murata, managing director and portfolio manager.

The Pimco Investment Grade Credit Fund – ticker IGCF – offers investors access to an actively managed bond portfolio that invests primarily in non-Canadian-dollar high-quality corporate bonds diversified broadly across industries, issuers and regions. The fund is managed by Mark Kiesel, managing director and chief investment officer of global credit.

Management fees for both funds are 0.75 per cent.

The new ETF series will provide investors an alternative avenue to the already established mutual funds, said Stuart Graham, managing director and head of Pimco Canada in a statement.

"We want to provide our Canadian investors with additional, convenient access points to two of our most popular bond strategies" said Mr. Graham. "The new ETF series will give clients the ability to choose the vehicle that best suits their needs."

Pimco Canada has approximately seven mutual-fund offerings that focus on the fixed-income space including the Balanced Income Fund and Canada Total Return Bond Fund.

The pivot from mutual funds into ETFs by Pimco Canada follows a similar strategy as its U.S. parent Pimco implemented in 2009 when it entered into the U.S. ETF market by mimicking some of its strongest mutual-fund offerings to ETF investors. One of the first ETFs to market in the United States included the Pimco Enhanced Short Maturity Strategy Fund, which has more than $7.4-million (U.S.) in assets under management as of Oct. 2, 2017.

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In 2012, the U.S. firm rolled out a much-anticipated ETF based on famed bond investor Bill Gross and his flagship Pimco Total Return mutual fund. At the time, Mr. Gross had more than $251-billion in assets under management within the mutual fund that incorporated a combination of options, futures and swap agreements.

Today, the U.S. ETF fund family consists of 15 funds that include corporate bonds, government bonds and high-yield bonds. Management fees in the U.S range from 0.15 per cent to 0.55 per cent.

The global fixed-income investment manager has more than $1.61-trillion in assets under management worldwide in ETFs, mutual funds, close-ended funds and managed accounts.

Pimco Monthly Income Fund (PMIF)

Close: $20.01, up 1¢

Pimco Investment Grade Credit Fund (IGCF)

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Close: $20.02, up 2¢

Video: Money Monitor: Breaking down smart beta ETFs (The Canadian Press)
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About the Author
Globe Investor Reporter

Clare O’Hara is a reporter at The Globe and Mail. Prior to that, Clare spent eight years as a staff writer at Investment Executive, a national newspaper for financial service industry professionals. More

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