* Unknown company released ticker for use
* ETF has outperformed fund by 1.5 percent
By Jessica Toonkel
March 28 Pacific Investment Management Co is
getting a new ticker for its closely-watched Total Return
Exchange Traded Fund: BOND.
The Newport Beach-based asset manager decided to change the
ticker from "TRXT" to "BOND" to make it easier
for investors to find the fund, a spokesman said.
"With ETFs, the ticker often becomes the most recognizable
name for the fund; in some ways it becomes the personality or
character of an ETF," the spokesman said. "The ticker BOND will
be easy for investors to remember, and it feels very natural in
The BOND ticker had been reserved by another company when
Pimco first filed to launch the ETF last year, and thus PIMCO
could not use it. A company can reserve a ticker for two years.
But a few weeks ago, New York Stock Exchange officials asked
that company if it would release the ticker, and the company
agreed, said Laura Morrison, a senior vice president with the
NYSE. She declined to name the company that had reserved the
The new ticker will take effect April 4 on the New York
Stock Exchange's Arca platform.
Pimco's Total Return ETF is an ETF clone of the firm's $252
billion Total Return Fund. Financial advisers and
asset managers have been closely watching the ETF since it
launched on March 1 to see if it would take off,
The ticker change is a great marketing move that should help
the ETF gather assets, observers said. In January, Bill Gross,
co-chief investment officer of Pimco and manager of the mutual
fund and ETF, said he expected the ETF to eventually become one
of the biggest ones available.
The fund started out on March 1 with $100 million in seed
money, according to IndexUniverse LLC. It now has close to $257
million in assets under management.
"This is on track to be one of the biggest ETF launches in
history," said Dave Nadig, director of research at
IndexUniverse, which tracks ETFs. "A usual good fund launch is
$50 million in the first month."
On top of having the Bill Gross name attached to it, the
Total Return ETF so far has proven to perform better than its
mutual fund counterpart, which may account for why investors are
rushing into the ETF despite it being so new.
Since its launch the ETF has returned 1.62 percent, while
institutional-shares of the fund have returned 0.17 percent.
The ETF is able to move in and out of positions quickly
since the fund is much smaller than the behemoth $252 billion
The ETF also has 75 percent invested in mortgage-backed
securities; the fund had 52 percent as of the end of February.
One reason the ETF may own more mortgage backed securities
than the mutual fund is because unlike the mutual fund, it
cannot use derivatives
The fund's ability to own so much in mortgages does raise
some questions about whether it is appropriate for the ETF to
bear the BOND ticker, Nadig said.
"The idea that this becomes the household name of bond
exposure is slightly dangerous given that this is an active fund
and not necessarily representative of the broader bond market,"
Even before Wednesday's announcement, investors have been
asking about the ETF, which is pretty rare, said Rich Romey,
president of ETF Portfolio Partners Inc, a registered investment
Within the first several days of its launch, Romey had
received 15 calls from clients, he said.