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Bill Gross' PIMCO Total Return ETF could transform industry

Wednesday, February 29, 2012 - 02:16

Feb. 29 - Bill Gross' PIMCO Total Return ETF launches March 1st. Analysts say it could convince a wave of mutual fund managers to launch ETF versions of their funds and lead to lower fees for investors.

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The most closely watched ETF to launch this year could shake up the fund industry. The world's largest mutual fund can post 250 billion dollar total return fund run by bond king Bill Gross. Puts out an ATF version on Thursday. Ten cold charged retail investors 55 basis points for the -- some 35 points less than its mutual fund cousin. That -- pressure on families to chop their fees which are double that of ETFs on average. The Pimco total return bond fund is a behemoth of funds so one of things that start going forward is -- got economies of scale open in addition. Because it's an ATF and actually as low trading costs and put. Pressure on other funds in the community whether PTF or open and funds. To actually drive down those expenses because they need to stay competitive as well. And bill grosses grand entry -- active fund managers to rethink their strategies. Many of them refrained from putting that ETF versions because that would make them unveil their holdings every day. And they fear being mimicked and front run what's more lower fees would cut into margins. Active fund ETF -- make up less than half of 1% of the total US ETF market. Bill Gross who -- markets Bill Gross will attract. Arbitrage interest. So if his ETF can successfully navigate the daily disclosure portfolio. That would go some way to using anxieties among traditional fund managers. Into going down the path of actively managed ETF with the -- portfolio disclosure. For Pimco the big question is what is each -- cannibalize the mutual fund they sound the same but they're not. Unlike the fund ETF will not use derivatives like swaps and options tools they -- traditionally uses to hedge risk and boost returns. The Kiev may not track the fund is closely as investors expect. So those who want the whole Bill -- experienced winds that handicapped may stick with their funds. If growth is new product proves a hit look for more active managers to jump in to that you PF game. I'm Fred Katayama this is what.

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Bill Gross' PIMCO Total Return ETF could transform industry

Wednesday, February 29, 2012 - 02:16