Indexor

PIMCO Treasury ETF on Solid Ground: Is iShares Ready?

PIMCO should be a welcome addition to the ETF marketplace. They will likely begin with the typical lineup of fixed income products mirroring iShares, with similar if not the same performance. But lurking behind could be other fixed income products not currently available in the ETF space and appealing not only to institutional investors but more sophisticated advisors and individual investors as well. This includes active funds, although PIMCO has always managed their active mutual funds closely to a specific index, a startegy even pure index ETF users will find appealing.

Additionally, they could add true validity to the commodity offerings currently available (especially those of iPath that are not part of the BlackRock deal). PIMCO is a big believer in "alternative asset classes." They have a wealth of knowledge about this asset class, including the tax issues that have tripped up many unsuspecting investors. They will likely win back many prior investors and advisors who stopped using PIMCO because of their mutual fund-only access.

Many view PIMCO as Bill Gross. While Mr. Gross built PIMCO into the success it is today, he would be the first to tell you that there are plenty of other bright investment minds helping to run his shop. Access to these individuals through the ETF structure should prove to be a huge edge in the future. And Mr. Gross is not getting any younger. Mohamed El-Erian is well positioned to continue the PIMCO traditions.

Last, PIMCO has always provided excellent support for their products in terms of excellent web sites, telephone contact, fund information and timely performance data for both their funds as well as the underlying indices being targeted. While they will certainly have the ability to keep BlackRock's iShares on their toes, they could eventually overtake iShares in terms of assets, especially when considering the cache that is attached to the PIMCO brand.