Richard Drury
Thesis
All the large asset managers have issued active exchange-traded funds, trying to capture alpha by shadowing aggregate fixed income funds. We first covered the PIMCO ETF trying to achieve this feat two years ago here. The
BOND: Another Attractive Opportunity From Pimco
Summary
- BOND has nearly doubled its AUM to $5.5 billion in the past two years and has outperformed its actively managed peers and passive benchmark.
- The fund primarily invests in investment-grade MBS bonds and Treasuries, with a portfolio duration of 6.5 years, placing it in the intermediate duration category.
- While BOND's annualized volatility of 7.4% is higher than the Bloomberg U.S. Aggregate Index's 5%, its superior total return performance suggests that the active management's risk-taking has been justified.
- Active management allows BOND to strategically allocate among sectors (e.g., favoring MBS and Treasuries over tight-spread corporates) and capitalize on potential rate cuts.
With an investment banking cash and derivatives trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for over 20 years after obtaining a Finance major at a top university.
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