PIMCO Sr Ln Actv ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in corporate bonds and AAA rated bonds compared with category peers. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. PIMCO Sr Ln Actv ETF earns an Average Process Pillar rating.    The most significant contributor to the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.3 stars. The firm's five-year retention rate of 82% also buttresses the rating. Lastly, the process is limited by the experience of the management team, which averages five years at this fund.

 Compared with other funds in the Bank Loan Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the category average, the managers have been significantly overweight corporate debt in recent years. In the latest month, the strategy has relatively overweighted corporate debt compared with its peers as well. Additionally, there's been a notable overallocation to AAA rated bonds over the past few years. Compared with category peers, the strategy had more exposure to AAA rated bonds in the most recent month. Finally, during the past few years, the fund leaned towards debt with five- to seven-year maturities. In this month, the strategy also leaned more towards debt with five- to seven-year maturities compared with its peers.

 This strategy has a modest 8.1% 12-month yield, lower than its average peers' 8.6%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 7.0%. While a lower yield may deliver less income, it also tends to indicate lower credit risk. The portfolio holds assets with a higher average surveyed credit quality of BB, compared with the category average of B, and its non-investment-grade stake is 91% of assets, compared with its average peers' 84%. Strategies with less credit risk may help to provide a reliable ballast during periods of market stress.

Average

Process

PIMCO Sr Ln Actv ETF earns an Average People Pillar rating. The strategy is backed by Tanuj Dora, the longest-tenured manager, who has been a listed portfolio manager for eight years.  Tanuj Dora has an adequate backdrop of support, drawing on three additional listed managers, averaging five years of listed portfolio management experience.  The highest personal investment by any of the strategy's managers is between $50,000 and $100,000. That is too low to promote alignment of their interests with the fund's investors. 

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

Some concerns notwithstanding, Pimco's massive resources--both capital and human--and its laser ‎focus on excellence merit an Above Average Parent rating.‎
True, Pimco could be better on pricing. Shareholders, particularly in Europe, haven't enjoyed the ‎economies of scale that they could given Pimco's massive asset base. The firm, however, believes its ‎pricing is fair based on what it consistently delivers for investors, and it's hard to argue that's not the ‎case.‎
Pimco has generally enjoyed great success with its intense working culture, even if departures are a ‎byproduct of that intensity and can sometimes dim the near-term outlook on strategies. Yet, more ‎often than not, Pimco draws on its legion of skilled people and positions the next generation to ‎thrive.
CIO Dan Ivascyn and CEO Manny Roman ‎represent that next generation and have built on the organizational strengths they inherited. An experienced and critical-thinking investor, ‎Ivascyn has sought to curate an elite staff and capable investment culture since he assumed his ‎current role in 2014 and since Roman joined him in 2016. They have significantly grown the firm's pool ‎of investment professionals and supported them by spending massively on technology and ‎technologists to spur persistent outperformance while keeping risk in check. There may be a few others in Pimco's league, but very few.‎

Above Average

Parent

Pimco Senior Loan Active Exchange-Traded Fund

LONZ seeks current income through the active management of US dollar-denominated senior floating rate bank loans that are rated below investment grade.

This article explores the PIMCO Senior Loan Active Exchange-Traded Fund ETF, a fixed income fund launched by PIMCO in 2022.

LONZ: Under The Radar Fund From PIMCO, 7% Yield

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A changing interest rate narrative prompted many advisors and investors to reevaluate their bond exposures this month. Asset managers stepped in to offer their perspectives on the changing market dynamics and where the risks and opportunities lie in the 2024 Fixed Income Symposium hosted by VettaFi.

Recapping the 2024 Fixed Income Symposium

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Fixed income ETFs gathered $51 billion of new money in the first quarter. This represented 26% of the industry's net inflows.

Looking to Loan ETFs

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T Rowe Price US High Yield ETF

Hello, VettaFi Voices! The Wall Street Journal mentioned today that the 10-year Treasury yield is the highest it's been since 2007 as we head into another earnings season.

VettaFi Voices On: Investments for a (Not so) Scary Market

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With the Fixed Income Symposium taking place on Monday, July 24, the VettaFi Voices gathered at the water cooler to discuss the current state of fixed income markets.

VettaFi Voices On: The State of Fixed Income

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This week, the VettaFi Voices gathered around the water cooler to talk about fixed income.

VettaFi Voices on: What's Overlooked in Fixed Income

PIMCO Active Bond ETF

It has been nearly 30 years since the first U.S.-listed ETF began trading, so it is rare to find a new first for the industry to occur. Yet today, the PIMCO Active Bond ETF (BOND) became the first active ETF to be traded from an actual booth on the New York Stock Exchange (NYSE) floor.

PIMCO's ETF Transfer to NYSE Floor Trading Is a Key Milestone

The Senior Loan Active Exchange-Traded Fund (LONZ) started on June 8, 2022, and will actively manage itself using the iBoxx USD Liquid Leveraged Loans Index. With an effective duration near .6 years, PIMCO believes it's a good ETF for times like these when interest rates are climbing. The Index has a .2 duration.

LONZ: PIMCO Launches Short Duration Senior Loan ETF

PIMCO is expanding its actively managed fixed income exchange traded fund suite with the addition of a new ETF that may help diversify fixed-income allocations for investors concerned about rising rates. The PIMCO Senior Loan Active Exchange-Traded Fund (NYSE Arca: LONZ) aims to find compelling opportunities in the senior loan market where investments may offer [.

Through LONZ, PIMCO Seeks Compelling Opportunities in the Senior Loan Market

News for Pimco Senior Loan Active Exchange-Traded Fund ETF (LONZ)