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David Fry
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David Fry writes a subscription newsletter focused on technical analysis of exchange-traded funds, called ETF Digest ( Dave founded the ETF Digest in 2001 and was among the very first to see the need for a publication that provided individual investors with information and... More
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ETF Digest
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The Best ETFs: U.S. Equities (A Companion Guide To Building Your ETF Portfolio)
  • When To Trade Pimco's Active ETF: TRXT 0 comments
    Mar 5, 2012 2:24 PM | about stocks: BOND

    Fixed income guru Bill Gross made waves on Thursday with the launch of his PIMCO Total Return ETF (TRXT). Unlike most ETFs which seek to replicate the returns of a given index, TRXT is structured as an actively managed fund.

    Actively managed funds differ from other ETFs in two important ways: they have higher expense ratios (compare TRXT's expense ratio of 0.59% after all fees to the popular SPY's 0.09%) and are less transparent. This isn't to say that information on an actively managed ETF's holdings areunavailable to the public; far from it-TRXT will reveal its holdings daily. Rather, it is not linked to any specific benchmark, and so investors must trust completely in Bill Gross's investment wisdom.

    Even so, the evidence suggests that their trust would not be misplaced. Bill Gross is a star of the mutual fund world, and currently manages the PIMCO Total Return Fund (PTTRX), the largest mutual fund in the world in terms of assets under management, totaling $250.47 billion as of February 3rd.

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