Pimco Foreign Currency Strategy (FORX)
Actively managed currency basket targets nondollar currencies.
Pimco rolled out an actively managed non-dollar currency ETF that will seek out any number of currencies—including those from emerging market countries—that could outperform the dollar over the long term.
The Pimco Foreign Currency Strategy Exchange-Traded Fund (FORX) invests in a combination of short-term fixed-income instruments, money market securities and currency forwards backed by high-quality, low-duration securities. It comes with an annual expense ratio of 0.65%, including a 0.11% fee waiver.
The new fund joins other multicurrency strategies already on the market, notably two ETFs from WisdomTree—the WisdomTree Commodity Currency Fund (CCX) and the WisdomTree Emerging Currency Fund (CEW), which both come with expense ratios of 0.55%.
Pimco said it will select the fund’s country and currency composition based on its evaluation of relative interest rates, inflation rates, exchange rates, monetary and fiscal policies, trade and current account balances, legal and political developments and other specific factors it believes to be relevant.
FORX will be able to invest in investment-grade and high-yield securities, in addition to unrated debt that is of comparable quality. The duration of the securities will be anywhere between zero and three years, the Newport Beach, Calif.-based company said in a summary prospectus.