Pimco, Source introduce dividend distributing share class for EM local currency bond ETF

Jan 30th, 2014 | By | Category: Fixed Income

Pimco, a leading global manager of fixed income investments, and Source, a European provider of exchange-traded products (ETPs), have introduced a monthly dividend distributing share class for the Pimco EM Advantage Local Bond Index Source ETF.

Pimco, Source introduce dividend-distributing share class for EM local currency bond ETF

Ted Hood, CEO of Source.

The dividend distributing share class is available on the London Stock Exchange under the ticker EMLI. It trades in USD.

Launched in September 2011, the fund, which has more than $200 million in assets, provides exposure to local emerging market sovereign debt via the Pimco EM Advantage Local Currency Bond Index, an innovative, GDP-weighted index covering 15 emerging market countries.

By tracking this GDP-weighted index, the ETF delivers access to key emerging market countries absent from traditional capitalisation-weighted emerging market fixed income indices, most notably China and India. As of end of December 2013, the effective yield of the index was 7.4% with a duration of 3 years.

“Due to its exposure to a broader set of systemically important emerging market countries via variouslocal currency fixed instruments, the EM Advantage ETF offers investors a lower duration and lower volatility alternative to traditional EM local debt exposure.” says Fabrizio Palmucci, Director at Source. In 2013, the index outperformed the benchmark JP Morgan GBI-EM Global Diversified Index by 3.1%.

“We are seeing significant investor interest in this product,” added Source CEO Ted Hood. “We are pleased to be able to launch a dividend distributing share class in response to strong client demand. EM local debt offers interesting yield opportunities which a number of clients have expressed the desire to receive as monthly distributions.”

The fund has an annual management fee of 0.60%.

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