When it comes to ETFs and superlatives, few can surpass the
PIMCO Total Return ETF (NYSE:
). Not only is the fund frequently referred to as the Bill Gross
ETF, perhaps the best marketing advantage in the history of ETFs,
BOND is now the largest actively managed ETF.
It is impressive that BOND is the largest actively managed ETF,
but what is more impressive is how quickly the fund the fund has
amassed almost $2.1 billion in assets under management. BOND
reached that lofty total in less than five full months of
That means BOND is by far the most successful new ETF of 2012 in
terms of assets. To its credit, BOND deserves the ample praise it
has received because the fund has returned 5.3 percent since
Yet for the warranted superlatives, BOND has not been the
best-performing bond fund investors could have been involved with
over the past 90 days. Believe it or not, there are multiple bond
ETFs that have outpaced BOND in the past three months and some are
worth more than just a passing glance.
PowerShares Emerging Markets Sovereign Debt ETF (NYSE:
) In terms of AUM, BOND recently passed the PowerShares Emerging
Markets Sovereign Debt Portfolio, but with $2.06 billion in AUM,
PCY is still a big ETF. This monthly dividend payer
has also been at the right place at the right time
as investors have embraced dollar-denominated emerging markets
PCY's particulars stack up favorably against BOND's. The former
charges 0.5 percent per year compared to 0.55 percent for the
latter. The 30-day SEC yield on PCY is roughly 260 points higher
than BOND's. More importantly, PCY has outperformed BOND by 110
basis points in the past 90 days.
PCY's primary rival, the iShares J.P. Morgan USD Emerging
Markets Bond Fund (NYSE:
), has lagged BOND over that time.
Market Vectors CEF Municipal Income ETF (NYSE:
) A recent jump in municipal bankruptcies might have some investors
thinking twice about muni bond ETFs, but the numbers do not lie.
The Market Vectors CEF Municipal Income ETF acts as a fund of funds
because its index is composed of shares of municipal closed-end
funds "that are principally engaged in asset management processes
designed to produce federally tax exempt annual yield," according
to Market Vectors.
XMPT is tiny with just $10.1 million in AUM, but the ETF
features an expense ratio of 0.4 percent and a 30-day SEC yield of
5.43 percent, besting BOND on both accounts. In the past three
months, XMPT has outpaced BOND by 45 basis points.
iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: )
BOND still has a long way to go to rival the iShares iBoxx $
Investment Grade Corporate Bond Fund, the largest ETF tracking
corporate bonds, in terms of AUM. LQD's haul is almost $23.5
billion. The PIMCO offering is not heavy on corporates, so some
might say this is not an apples-to-apples comparison.
Fair enough, but LQD is the type of ETF conservative income
investors look to, as is BOND. However, LQD is far cheaper with
fees of just 0.15 percent per year. In the past 90 days, BOND has
narrowly outperformed LQD, but the tide has turned strongly in
favor of LQD in the past month. In that time, iShares fund has
generated almost double the returns offered by BOND.
WisdomTree Emerging Markets Local Debt Fund (NYSE: ) A lot of
folks have said BOND is a "game-changer" among actively managed
ETFs. Perhaps they did not get the memo about the WisdomTree
Emerging Markets Local Debt Fund. Long before BOND came around, ELD
became the first actively managed ETF to surpass $1 billion in AUM.
Meaning that it was ELD that BOND wrested the title of "largest
actively managed ETF" from.
ELD still has a few feathers in its cap. It has the same fees as
BOND and the former's 30-day SEC yield is far higher than the
latter's. A solid alternative for investors looking for non-dollar
denominated assets, ELD is up 2.4 percent in the past month
compared to 1.8 percent for BOND.
For more on income ETFs, click .
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