The bond giant is diversifying away from its core expertise.
On the heels of the impending departure of Mohamed El-Erian, Pimco has filed regulatory paperwork to diversify its portfolio into equities and commodities. But the bond behemoth isn’t ignoring the fixed-income space altogether.
Pimco’s drive into equities comes on the heels of the S&P 500 Index 30 percent surge last year on the strength of an accommodating Federal Reserve and historic low interest rates. To that end, Pimco is hoping that its proposed Pimco StocksPlus Absolute Return Strategy Exchange-Traded Fund can keep the return flows going for potential investors.
The fund will look to exceed the total return of the S&P 500 Index by investing under normal circumstances in S&P 500 Index derivatives, backed by a portfolio of fixed-income instruments, according to a regulatory filing.
Also, the firm has filed paperwork for the Pimco CommoditiesPlus AR Strategy Exchange-Traded Fund, which will invest in commodity-linked derivative instruments, including commodity index-linked notes, swap agreements, commodity options and futures contracts, backed by an actively managed portfolio of fixed-income instruments, according to a regulatory filing.
Also, Pimco has also filed to launch a quartet of fixed-income funds, including the:
- Pimco Municipal Bond Exchange-Traded Fund
- Pimco Foreign Bond Exchange-Traded Fund (U.S. Dollar-Hedged)
- Pimco Income Exchange-Traded Fund
- Pimco Unconstrained Bond Exchange-Traded Fund
Related fund fees and tickers were not available for the new proposed offerings.
- iShares has filed to launch an actively managed commodity fund dubbed the iShares Commodities Strategy ETF, which will have exposure to a broad basket of commodities, including metals, soft commodities (cocoa, coffee) and energy (crude oil, natural gas) via a combination of exchange-traded commodity futures contracts and commodity-linked instruments.
The fund, which is in a master-feeder structure, expects to gain exposure to commodity-linked investments by investing up to 25 percent of its total assets in a wholly owned subsidiary in the Cayman Islands.
- IndexIQ’s has filed regulatory paperwork to launch the IQ Wilshire Alternative Strategies ETF that will invest in hedge-fundlike strategies such as equity long/short and event-driven via a multimanager approach, according to a regulatory filing.
The fund will invest in a portfolio consisting of some or all of equity securities, real estate investment trusts, master limited partnerships, floating-rate securities and junk bonds, among other instruments.
Santa Monica-based Wilshire Associates, a consulting firm with assets under advisement of about $1 trillion, is a subadvisor and consultant to the fund. The fund’s related fees and tickers were not available in the filing.