PIMCO Gears Up to Launch More Bond ETFs

• By Tom Lydon
• On 9:08 am EDT, Monday October 26, 2009

Tom Lydon (ETF Trends) submits: PIMCO is set to launch two new bond ETFs linked to Treasuries. This is adding to the bond giant’s growing category of bond-related funds.

The two new ETFs PIMCO is adding to their lineup include:

PIMCO 3-7 Year Year U.S. Treasury Index Fund (NYSEArca: FIVZ)PIMCO 20+ Year Zero Coupon U.S. Treasury Index (NYSEArca: ZROZ) Cinthia Murphy for Index Universe notes that the annual expense ratio for both funds is set at 0.15%.

When it launches, ZROZ will face off with the Vanguard Extended Duration Treasury (NYSEArca: EDV), which launched in December 2007, which tracks the Treasury STRIPS 20-25 Year Equal Par Bond Index. FIVZ will face the iShares Barclays 3-7 Year Treasury Bond Fund (NYSEArca: IEI).

STRIPS Treasury bonds are securities that are sold at a discount to their face value. They don’t offer interest payments because they mature at par. The securities were first offered in 1985.