PIMCO is putting its formidable municipal bond and credit expertise behind its newest exchange traded fund (ETF), and actively managed intermediate municipal bond fund.
The PIMCO Intermediate Municipal Bond Strategy Fund (NYSEARCA:MUNI) is an actively managed ETF that will hold a portfolio of primarily high-quality, intermediate maturity, AMT-free municipal bonds. One of the big attractions of municipal bonds is that their income is exempt from federal, and in some cases, state taxes, reports CNN Money.
The ETF’s manager will be PIMCO Executive Vice President and Municipal Bond Desk Head John Cummings. He notes that the U.S. fiscal outlook will likely include higher marginal tax rates in the years to come, which will lead to more demand for tax-efficient investments. MUNI features monthly dividends and has a 0.35% expense ratio.
Daily bond holdings in the fund will be disclosed daily in order to deliver as much transparency as possible. Active management within the ETF is also a benefit should the credit conditions change, then the portfolio can be adapted accordingly. (Check out another new release from PIMCO).