Daily ETF Watch: Pimco Axes Treasury ETF

Pimco decides to throw in the towel on a broad Treasury ETF that hasn’t gathered assets.

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Reviewed by: Hung Tran
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Edited by: Hung Tran

Pimco decides to throw in the towel on a broad Treasury ETF that hasn’t gathered assets.

 

Pimco is shuttering its Pimco Broad U.S. Treasury Fund (TRSY | C-63), a laddered strategy of holding three of the most recently issued 2-, 3-, 5-, 7-, 10- and 30-year U.S. Treasury notes and bonds, on March 14, according to a regulatory filing.

The fund’s closing comes at a time when Treasury yields are at ultra-low levels, turning investors on to all corners of the ETF universe for yields, including riskier equity securities. Year-to-date, Treasury 30-year note yields dropped from 3.92 percent at the beginning of the year to 3.60. Yields on five-year notes meanwhile dropped from 1.72 percent to 1.51 percent.

TRSY was launched in October 2010, but has managed to gather only $8 million since inception. The fund will stop trading on March 10.

Launches

Horizons ETF Trust on Tuesday, March 4, is launching the Horizons Korea KOSPI 200 ETF (HKOR), one of three country-specific ETFs that the firm is looking to bring to market at a time when emerging market stocks remain underpressure as the Federal Reserve continues to unwind its economic stimulus.

The Korea KOSPI 200 ETF will track the KOSPI 200 Index, a free-float-adjusted, market-capitalization-weighted index comprising 200 blue chip companies listed on the Korea Stock Market based on their market and sector representation and liquidity.

The Federal Reserve’s newly minted Chair Janet Yellen has promised to keep short-term rates at ultra-low levels in 2014 and beyond, even as the central bank continues to taper its “quantitative easing” economic stimulus, keeping investors’ focus on alternative-income plays in all corners of the ETF space, including emerging markets.

The Horizons fund will have an annual expense ratio of 0.38 percent, or $38 for every $10,000 invested, and will be listed on the NYSE Arca, according to a NYSE communique.

Filing

iShares today is changing the names of eight target maturity corporate bond ETFs, but is leaving intact their respective tickers and underlying indices, according to a NYSE communique. The eight funds consist of two groups of four funds—one excluding credits from the financial sector and the other quartet including them.

The affected “ex-financials” funds include:

  • iSharesBond 2016 Corporate ex-Financials Term ETF (IBCB | B-51), which will be renamed the iSharesBond Mar 2016 Corporate ex-Financials Term ETF
  • iSharesBond 2018 Corporate ex-Financials Term ETF (IBCC | B-68), which will be renamed the iSharesBond Mar 2018 Corporate ex-Financials Term ETF
  • iSharesBond 2020 Corporate ex-Financials Term ETF (IBCD | B-65), which will be renamed the iSharesBond Mar 2020 Corporate ex-Financials Term ETF
  • iSharesBond 2023 Corporate ex-Financials Term (IBCE | B-38), which will be renamed the iSharesBond Mar 2023 Corporate ex-Financials Term

The funds that include financial sector bonds are:

  • iSharesBond 2016 Corporate Term ETF (IBDA), which will be renamed the iSharesBond Mar 2016 Corporate Term ETF
  • iSharesBond 2018 Corporate Term ETF (IBDB), which will be renamed the iSharesBond Mar 2018 Corporate Term ETF
  • iSharesBond 2020 Corporate Term ETF (IBDC), which will be renamed the iSharesBond Mar 2020 Corporate Term ETF
  • iSharesBond 2023 Corporate Term ETF (IBDD), which will be renamed the iSharesBond Mar 2023 Corporate Term ETF

 

Hung Tran is a former staff writer for etf.com.