PIMCO is expanding its suite of actively managed exchange traded funds with the launch of the PIMCO Preferred and Capital Securities Active ETF, a new ETF that seeks to deliver attractive levels of income and total return. Effective January 19, investors can trade PRFD on the NYSE Arca electronic exchange.
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. 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.
PIMCO’s global trading and research resources, including its team of over 80 research analysts and portfolio management team with more than 16 average years of investment experience, search for attractive investment opportunities across the global bank capital, non-financial preferred, and corporate hybrid markets.
“Advisors are increasingly turning to actively managed income-oriented ETFs to benefit from the security selection expertise of professionals,” said Todd Rosenbluth, head of research at VettaFi. “PIMCO has been a pioneer in the active ETF space, and it is great to see them expand their lineup.”
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,” Bodereau said in a news release.
PRFD, like many of PIMCO’s ETF offerings, embraces an active management approach that aims to help investors meet their long-term investment objectives.