is expanding its footprint in the bond exchange traded fund (
) space by launching two new additions to its lineup.
The two new funds are:
PIMCO Investment Grade Corporate Bond Index Fund
PIMCO Build America Bonds Strategy Fund (NYSEArca:
BABZ is actively managed and will invest in investment-grade
Build America Bonds. The fund has an introductory expense ratio of
0.45%. When the introductory period expires, the expenses will rise
to 0.55%. [
Invest In the Recovery With BABS.
There are a couple of Build America Bond ETFs already trading,
though both are passively managed:
PowerShares Build America Bond Portfolio (NYSEArca:
SPDR Nuveen Barclays Capital Build America Bond
For CORP, PIMCO will use its own optimization strategy in order
to ensure the fund holds liquid securities and a low risk of
default. The fund has a 0.32% expense ratio, though 0.12% of the
fee will be waived until October 2011, at least. [
The Case for BABS Bonds.
Not unlike BABZ, CORP will also have some competition in the
investment-grade corporate bond space:
iShares $ Investment Grade Corporate Bond (NYSEArca:
For full disclosure, Tom Lydon's clients own LQD.
Tisha Guerrero contributed to this article.