Pimco’s MINT attracting plenty of green

Pacific Investment Management Co. LLC's Enhanced Short Maturity Strategy Fund exchange-traded fund is off to a rousing start — a development that's not going unnoticed by rivals or advisers.

Pacific Investment Management Co. LLC’s Enhanced Short Maturity Strategy Fund Ticker:(MINT) exchange-traded fund is off to a rousing start — a development that’s not going unnoticed by rivals or advisers.
The MINT fund, which was launched in December, brought in $595 million in assets that month — in the midst of severe market volatility, no less. All told, the fund’s assets have quadrupled since the end of April and now top $837 million, according to the firm.
Pimco didn’t make any changes to the distribution strategy of the fund during this time, said Steven Vames, a spokesman.
The Fund is Pimco’s first actively managed fixed income fund, and experts predict that in the wake of its success, other firms will follow suit. Last month, Grail Advisors LLC announced that it had partnered with Western Asset Management Co. to launch the Grail Western Asset Enhanced Liquidity ETF, an actively managed short-term fixed-income ETF.
Actively managed short-term fixed-income ETFs make a lot of sense, given the low yield on money market funds and the volatile markets, said Paul Justice, an analyst with Morningstar Inc. “An active manager can go out and find the best values in the bond market rather than have an index that invested in things that aren’t trading at all,” Mr. Justice said. “Investors are not worried about the daily transparency of an ETF when it comes to the short-term-bond market.
Advisers are watching MINT closely. “We typically wait until an ETF has a three- or four-quarter track record before we use it, but we may add this one a little sooner,” said William E. Koehler, chief investment officer at ETF Portfolio Partners Inc. Given that the fund’s yield is 0.61%, that’s much more attractive than what money markets are offering these days, he said.
“The interesting thing to see is if the market goes up, will money flow out of the fund the same way it flowed into the fund in May?” he said. “That’s what we are looking to see.”