Cream-of-the-Crop Bond Funds: Pimco Total Return Exchange-Traded Fund (BOND)
SEC Yield: 2.7%
Pimco has always been a leader in fixed-income, and its flagship total return bond fund continues to perform at a strong pace.
The most interesting thing about PIMCO Total Return Exchange-Traded Fund (NYSEARCA:BOND) is its use of futures and currency swaps to manage risk. The portfolio is currently balanced between conventional U.S. fixed-income exposure paired with interest-rate hedges, inflation protected bonds and emerging-market debt.
Over the past six months, this has led to diminished price volatility versus the Barclays benchmark.
Pimco takes a team approach to its credit and security selection criteria within the BOND portfolio as well. The effective duration is currently 5.71 years with a 30-day SEC yield of 2.7%. Its objective has always been one of a core holding for investors to utilize in lieu of a diversified index. Furthermore, the fund charges the same expenses as TOTL.
For full disclosure, we currently recommend BOND for subscribers to the Flexible Growth and Income Report.
David Fabian is Managing Partner and Chief Operations Officer of FMD Capital Management. As of this writing, Fabian was long TOTL, and FMD Capital Management has recommendations on both BOND and TOTL. To get more investor insights from FMD Capital, visit their blog.