PIMCO issues first actively managed fixed income ETF in Euroclear’s international structure
Brussels, 1 December 2014 - PIMCO, a world-leading investment manager, has today made history by launching the first actively managed fixed income ETF in Euroclear Bank's international structure. The PIMCO Low Duration US Corporate Bond Source UCITS ETF has today listed on the London Stock Exchange, and is available for trading.
The ETF’s primary market issuance will be in Euroclear Bank, the International Central Securities Depository (ICSD). Additionally, transaction settlement – both OTC and on-exchange – will take place within the ICSD structure, providing far greater simplicity and reduced risk and processing costs. Moreover, local CSDs can also provide post-trade services for such internationally-structured ETFs via their respective link with Euroclear Bank.
“We are delighted to be working with Euroclear to make available international settlement for our active PIMCO Low Duration US Corporate Bond Source UCITS ETF”, said Howard Chan, ETF product manager. “PIMCO is known as an innovator offering value-added ETFs through active and smart beta strategies. This step continues that spirit of innovation to improve European ETF trading dynamics.”
Stephan Pouyat, Global Head of Capital Markets at Euroclear, commented: "PIMCO is embracing more efficient post-trade processing, circumnavigating the need for time-consuming realignments and extra inventory buffers when buying an ETF in one domestic market, and selling it on in another. As a result of issuing in this international format, bid/offer spreads are expected to tighten considerably, which should drive greater investor interest in ETFs across Europe and beyond.”
Firms investing in this asset class benefit from greater levels of settlement efficiency, afforded through a longer intraday settlement window and the deep pool of international clients that are part of Euroclear’s securities settlement lending programme.
Note to editors
Euroclear is one of the world's largest providers of domestic and cross-border settlement and related services for bond, equity, ETF and other mutual fund transactions with offices in 15 countries across the globe and links to 46 international markets.
Euroclear is a proven, resilient capital market infrastructure committed to delivering risk-mitigation, automation and efficiency at scale for its global client franchise which includes over 100 central banks and supranationals.
The Euroclear group includes Euroclear Bank, which is consistently rated AA+ by Fitch Ratings and AA by Standard & Poor's, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. The group settled the equivalent of $789 trillion (€572 trillion) in securities transactions in 2013 representing 170 million domestic and cross-border transactions, and held over $33.3 trillion (€24.2 trillion) in assets for clients.