Pimco and Source launch German Bund ETF (BUND)

Jul 2nd, 2012 | By | Category: Fixed Income

Pimco, a leading global investment management firm, and Source, a specialist provider of exchange traded products, have launched the Pimco German Government Bond Index Source ETF (BUND). The fund has been listed on the Deutsche Börse (Xetra) and aims to track the Markit iBoxx € Germany Index.

Pimco and Source launch German Bund ETF (BUND)

The Pimco German Government Bond Index Source ETF marks the seventh addition to the physically invested Pimco Source range of ETFs launched last year.

In the current market uncertainty, many investors are seeking efficient ways to quickly switch between “risk-on” and “risk-off” positions. BUND helps achieve this by providing exposure to the German government bond market, a perceived safe haven during periods of “risk off”.

The ETF benefits from Pimco’s ‘smart passive’ management to minimise tracking differences without the use of securities lending to enhance returns. This ‘smart passive’ approach to managing fixed income index ETFs takes into account a number of factors including index selection and design, replication methodology and portfolio execution and rebalancing.

Ted Hood, CEO of Source commented on the launch: “When investors look to reduce risk, the structure behind the investment vehicle – how it generates its returns – is as important as the choice of asset class. We are delighted to extend our partnership with Pimco. The new BUND ETF combines the efficiency and liquidity of our ETF structure with Pimco’s world-renowned expertise in managing bond portfolios.”

Michael Surowiecki, Senior Vice President at Pimco and Portfolio Manager of BUND, said:  “The BUND market is over €1.1 trillion in outstanding issuance. German government bonds are a core investment position in most Europeans’ portfolios, and the BUND ETF provides access to Pimco’s index replication and trade execution capabilities in government bonds.”

BUND is registered for sale in the UK, Ireland, Austria, France, Finland, Germany, Italy (for institutional investors only), Netherlands, Norway and Sweden. It comes with a management fee of 0.15%.

The Pimco German Government Bond Index Source ETF marks the seventh addition to the physically invested Pimco Source range of ETFs launched last year comprising the MINT strategies – Europe’s first actively managed ETFs – and the forward-looking GDP-weighted fixed income ETF strategies designed to deliver better optimised replication of emerging market local government bond and European government bond benchmarks.

Alternatives include:

iShares Barclays Germany Treasury Bond ETF (SDEU)
Listed on the London Stock Exchange, registered for sale across much of EU, TER 0.20%

DB X-trackers iBoxx € Germany TR Index ETF (XBTR)
Listed on the Deutsche Börse (Xetra), Borsa Italiana and SIX Swiss Exchange, registered for sale across much of EU (inc UK Distributor Status), TER 0.15%

For more targeted exposure:

UBS-ETF Markit iBoxx € Germany 1-3 A (GS1EUA)
UBS-ETF Markit iBoxx € Germany 3-5 A (GS3EUA)
UBS-ETF Markit iBoxx € Germany 5-10 A (GS5EUA)
UBS-ETF Markit iBoxx € Germany 7-10 A (GS7EUA)

The above are listed on the London Stock Exchange, Deutsche Börse (Xetra), and SIX Swiss Exchange, TER 0.17%

DB X-trackers iBoxx € Germany 1-3 TR Index ETF (XB13)
DB X-trackers iBoxx € Germany 3-5 TR Index ETF (XGN5)
DB X-trackers iBoxx € Germany 7-10 TR Index ETF (XG71)

The above are listed on the Deutsche Börse (Xetra) and Borsa Italiana, registered for sale in UK (inc UK Distributor Status), German, Italy and Luxembourg , TER 0.15%

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