PIMCO to launch actively managed currency ETF

NEW YORK Mon Feb 11, 2013 10:03am EST

NEW YORK Feb 11 (Reuters) - Investment giant PIMCO will launch an actively managed exchange-traded fund on Feb. 12 that will target currencies outside the United States, the firm said on Monday.

The PIMCO Foreign Currency Strategy Exchange Traded Fund will hold currencies and bonds issued in local currencies, with a focus on diversifying away from the U.S. dollar, Pacific Investment Management Co said in a press release.

PIMCO, a unit of European financial services company Allianz SE, had $2 trillion in assets under management at the end of 2012. It is run by founder and co-Chief Investment Officer Bill Gross and Chief Executive and co-CIO Mohamed El-Erian.

The new ETF will be managed by Scott Mather, managing director and head of global portfolio management; Vineer Bhansali, managing director and head of quantitative investment portfolios; and Thomas Kressin, senior vice president and head of European foreign exchange. It will trade under the ticker symbol FORX.

Gross has criticized the high debt levels of developed economies, including the United States, in monthly letters to investors. He has also warned that the Federal Reserve's monthly purchases of $85 billion in Treasuries and agency mortgage securities will spur inflation.

Actively managed ETFs occupy a minor role in the ETF and exchange-traded product space, which surpassed $2 trillion in assets in January, according to investment firm BlackRock Inc.

PIMCO launched an ETF version of its flagship PIMCO Total Return Fund, the world's largest bond fund, on March 1, 2012. The PIMCO Total Return ETF, an actively managed ETF designed to mimic the strategy of the flagship fund, outperformed the mutual fund last year with a return of 11.75 percent, according to Lipper. The mutual fund earned 10.36 percent, according to Morningstar.

Gross's Total Return ETF was far more popular than any other active ETF, attracting inflows of $3.5 billion in 2012, according to Lipper.

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