Today, PIMCO enters the "enhanced cash" ETF marketplace with the launch of PIMCO Enhanced Short Maturity Strategy Fund. Portfolio Manager and Executive VP Jerome Schneider and PIMCO Senior VP and Product Manager Paul Reisz explain the ETF launch in an article entitled, "The Effects of the New Normal Environment on Cash and Short Duration Investing," "Simply put, we feel the pickup in yield potential from 'pure cash' to 'enhanced cash' investments is very attractive."
The company's press release, says, "PIMCO, a leading global investment management firm, has launched the PIMCO Enhanced Short Maturity Strategy Fund (NYSE: MINT), an actively managed Exchange Traded Fund (ETF) that employs the firm's proven investment process and cash management expertise. The new fund aims to preserve capital while also looking to offer more attractive yields than investors earn from money market funds." The company also has a Government Limited Maturity Strategy Fund (GOVY) ETF and a Prime Limited Maturity Strategy Fund (PPRM) ETF pending launch.
The release continues, "The post-crisis market environment has increased the need for suitable cash investments, as many individuals, corporations, pensions and other institutions are insisting on stringent risk controls and ready access to their cash -- yet paying the price in the form of money market returns that hover near zero. MINT may invest in similar high quality short-term instruments as money markets, as well as longer maturity bonds and a broader universe of investment-grade fixed income securities. This strategy, along with the transparency and intraday liquidity of the ETF format, makes MINT a potentially attractive solution for investors who want to preserve capital while seeking higher yields."
Schneider says, "Investors are holding a lot of cash, and are compelled to look for something beyond the near-zero yields that money market funds offer. MINT aims to maximize investors' current income by accessing PIMCO's discipline, risk management and market expertise within a highly liquid and transparent ETF."
Finally, the release adds, "Along with providing the daily portfolio transparency required by ETFs, PIMCO aims to deliver superior returns by employing the firm's market depth and execution ability as well as trading strategies that take the transparency into account.... PIMCO is owned by Allianz Global Investors, a subsidiary of the Munich-based Allianz Group, a leading global insurance company."
PIMCO's MINT offering joins SSgA's BIL (SPDR Barclays Capital 1-3 Month T-Bill ETF) and VRD (SPDR S&P VRDO Municipal Bond ETF), Invesco Powershares PVI (VRDO Tax-Free Weekly Portfolio, iShares SHY (1-3 Year Treasury), and the extinct Bear Stearns YYY (Current Yield) as one of the earliest entrants in the "near-cash" space. (See our previous News articles, "Near-Cash ETFs Rising; PowerShares VRDO PVI Breaks $1 Billion", "IndexUniverse: More on 'Cash' ETFs", "'Money Market ETFs' Not True Money Markets But Enhanced Cash", and "'Dreyfus Lends Its Clout to Foreign Bond, Cash ETFs' writes WSJ".)
