Source, a European provider of exchange-traded funds, and Pimco, a global investment management firm with a strong record in fixed income, have cross-listed two of their most popular ETFs on the SIX Swiss Exchange.
Fabrizio Palmucci, Director, Fixed Income Product Specialist, Source.
The Pimco Euro Short Maturity Source UCITS ETF (PJS1) and Pimco US Dollar Short Maturity Source UCITS ETF (MINT) were launched in 2011, initially on the Deutsche Börse and London Stock Exchange, and have since gathered assets of €1.3 billion and $1.8 billion respectively.
These short maturity funds – known as ‘MINT’, after the ticker code of the original US-listed fund – were the first actively managed ETFs to be listed in Europe and offer investors direct access to Pimco’s global cash management expertise.
The funds aim to preserve capital and provide the potential for superior income and total returns compared to traditional money market funds. They do this by investing in baskets of short-term investment grade debt securities. The funds are wholly transparent, with full disclosure of holdings published daily.
The fund managers look to take advantage of opportunities in the market by actively managing exposure to duration and credit. Currently, the euro fund has an effective duration of 0.98 years, while the US dollar fund has a shorter duration of 0.51 years. Both funds maintain duration of up to 1 year. In terms of credit exposure, the average rating within the two funds is currently A+.
Fabrizio Palmucci, Director, Fixed Income Product Specialist, Source, said: “Since their launch, the two funds have grown to become the largest actively managed fixed income ETFs in all of Europe. Many investors have really struggled to find a pick-up in short-term yield, especially with interest rates at all-time lows. The combination of a proven fixed income manager, a successful investment strategy, a relatively low level of risk, all offered in a transparent and highly liquid structure is clearly meeting the needs of European investors.”
Ted Hood, CEO, Source, added: “We are seeing significant interest in the MINT products. They were created to provide low volatility and enhanced returns over cash. Performance to date has been strong relative to the benchmark, for example the US Dollar fund returning 3.54% since inception in February 2011, compared to 0.21% for the Citigroup 3-month Treasury Bills index. And that’s net of fees. We are committed to expanding the range of funds available for investors to access via the SIX Swiss Exchange. We listed our first products in Switzerland in 2010 and, with the addition of the latest offerings, now have 32 ETPs trading on the exchange.”
Both funds have an annual management fee of 0.35%.