PIMCO launches fifth fixed-income ETF in Australia

PIMCO has announced the launch of its Short Term Active Yield Active ETF (EARN), marking its fifth active solution on the Australian market after the launch of four ETFs earlier in the year.

Designed for those seeking a modest shift from traditional savings vehicles, the fund manager said EARN aims to provide an alternative to cash and term deposits.

The short-duration, actively managed strategy combines capital preservation, liquidity, and enhanced return potential, targeting investors seeking a modest shift from traditional saving vehicles.

EARN, the firm explained, invests in a portfolio of investment-grade bonds and offers investors monthly income and daily liquidity “without compromising on credit quality”.

Built in response to shifting investor needs in the wake of falling cash rates and higher demand for low-duration, actively managed fixed-income strategies, PIMCO said the asset allocation of EARN makes it highly relevant for domestic investors.

“It fills a gap in the Australian ETF market by offering a local fixed interest strategy with a minimum of 50 per cent AUD-denominated bonds,” it said.

Sam Watkins, managing director and head of PIMCO Australia and New Zealand, said EARN will help investors “put their money to work while maintaining capital stability and liquidity”.

“It complements our existing suite of active fixed income ETFs and, as one of Australia’s biggest fund managers, reflects our commitment to delivering innovative solutions tailored to investors here,” Watkins said.

This announcement follows PIMCO’s launch of four fixed-income ETFs in February, including the PIMCO Global Bond Active ETF (PGBF), PIMCO Diversified Fixed Interest Active ETF (PDFI), PIMCO Global Credit Active ETF (PCRD), and PIMCO Australian Bond Active ETF (PAUS).

Available on Cboe Australia, the suite of ETFs were constructed to provide Australian investors with institutional-grade investment solutions and access to global fixed-income opportunities.

The suite provides investors access to a range of fixed-income investment options, ranging from global fixed-interest securities in the government, corporate, and mortgage space to Australian and global bonds.

Speaking at the time, Watkins said: “As one of Australia’s biggest fund managers, PIMCO is excited to introduce these active fixed income ETFs that will fill critical gaps in the market and meet the evolving needs of our clients. PIMCO has been in Australia for more than 20 years, and we look forward to expanding our ETF offerings in the future to meet the evolving needs of our clients.”

PIMCO manages some US$2.2 trillion ($3.38 trillion) in assets under management (AUM) as of 30 September.