PIMCO launches active commodities ETF

May 18th, 2023 | By | Category: Commodities

PIMCO has launched a new ETF in the US delivering access to an actively managed diversified commodities strategy.

Greg Sharenow, Head of PIMCO's commodity portfolio management group.

Greg Sharenow, Head of PIMCO’s commodity portfolio management group.

The PIMCO Commodity Strategy Active ETF (CMDT US) has been listed on NYSE Arca with an expense ratio of 0.64%.

The ETF’s management team is headed up by Greg Sharenow, Managing Director and head of the firm’s commodity portfolio management group.

Mr Sharenow is supported by Lewis Hagedorn, Executive Vice President; Andrew DeWitt, Executive Vice President; Jerome Schneider, Managing Director; and Andrew Wittkop, Executive Vice President. Collectively the five portfolio managers have 109 years of combined investment experience.

Commenting on the primary portfolio benefits of commodities exposure – inflation hedging, diversification, and return potential – Greg Sharenow said: “Persistent elevated inflation is a concern for investors who want to mitigate the negative effect of rising prices on their long-term savings. Historically commodities have acted as an effective hedge against inflation, and in today’s volatile markets we believe the asset class also is a compelling option for investors looking for a well-diversified portfolio.”

Investment approach

The fund invests in a broad range of commodity-linked instruments including swaps, futures, options, and commodity index-linked notes.

The strategy seeks to outperform the benchmark Bloomberg Commodity Total Return Index by harnessing PIMCO’s proprietary quantitative models to enact long, short, or net zero exposure across commodities from all major commodity sectors including energy, precious and industrial metals, and agriculture.

According to PIMCO, the investment team seeks out diverse sources of excess returns by incorporating multi-factor considerations such as storage costs of physical commodities and historic performance trends.

Being a leader in fixed income investment, PIMCO also actively manages the fund’s collateral holdings, offering two sources of potential alpha.

Tags: , , , , ,

Leave a Comment