The fund will invest primarily in Preferred and Capital Securities, which may provide investors diversification, favorable tax treatment, and opportunity for attractive yields
PIMCO, one of the world’s premier fixed income investment managers, is expanding its actively managed exchange-traded fund suite with the addition of a new ETF that aims to deliver attractive levels of income and total return.
The PIMCO Preferred and Capital Securities Active ETF (PRFD) aims to find compelling opportunities in the preferred and capital securities markets where investments may offer equity-like total returns with significantly less volatility – less than half, historically – compared with the traditional stock market.1 In addition, most preferred dividends are considered qualified dividend income (QDI) rather than regular income, which can provide a more favorable tax treatment for investors.
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PIMCO’s global trading and research resources, including its team of over 80 research analysts and portfolio management team with 16+ average years of investment experience, search for attractive investment opportunities across the global bank capital, non-financial preferred, and corporate hybrid markets.
The ETF will be managed by Philippe Bodereau, Managing Director, Portfolio Manager and Head of the Credit Research in Europe; Amit Arora, Executive Vice President and Portfolio Manager; Tanuj Dora, Vice President and Portfolio Manager; and Matthieu Loriferne, Executive Vice President and Portfolio Manager.
“Strong balance sheets and higher interest rates make financial institutions, which account for most of the preferred and capital securities market, an attractive investment for those looking for a diversified allocation in fixed income and the potential to earn equity-like returns,” said Mr. Bodereau.
PRFD, like many of PIMCO ETF offerings, embraces an active management approach that aims to help investors meet their long-term investment objectives. Investors can trade PRFD on the NYSE Arca electronic exchange, effective January 19.
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