Fixed income ETF specialist PIMCO has announced the end of its European distribution partnership with rival asset manager Invesco with plans to continue on the continent solely under its own brand.
Craig Dawson, Managing Director and Head of PIMCO EMEA.
PIMCO entered the European ETF market in 2010 through a distribution agreement with local issuer Source.
Invesco subsequently acquired Source in April 2017 as part of a broader push to expand its European ETF footprint.
The distribution partnership currently covers ten ETFs (not counting additional share classes) with $8.5 billion in assets under management.
The blockbuster products are the actively managed short-duration debt ETFs, PIMCO US Dollar Short Maturity Source UCITS ETF (MINT LN) and PIMCO Euro Short Maturity Source UCITS ETF (PJS1 GY), which target USD- and EUR-denominated securities respectively and have combined assets of well in excess of $5bn.
The USD short-duration strategy also underlies PIMCO’s flagship product in the US – the PIMCO Enhanced Short Maturity Strategy Fund (MINT US), known by its ticker, MINT – which houses some $12.3bn in assets.
PIMCO also offers a range of other fixed income exposures in Europe including short-maturity sterling securities, covered bonds, emerging market debt, and high-yield bonds. Each fund has over $100 million in assets with the largest of these being the $1.1bn PIMCO Short-Term High Yield Corporate Bond Index Source UCITS ETF (STHY LN).
Following the termination of the current agreement, distribution and servicing responsibilities of the ETFs will be assumed by PIMCO on 12 June 2020, along with changes of name to reflect the in-house distribution model.
PIMCO notes there will be no alteration to the portfolio management, investment strategy, or fee structure of the ETFs.
Craig Dawson, Managing Director and Head of PIMCO EMEA, commented, “Integrating our European UCITS ETF business with our global platform will enable us to continue to offer superior fixed income ETF solutions to clients and prospects throughout EMEA.”
Ryan Blute, Managing Director and Head of PIMCO’s Global Wealth Management business in EMEA, added, “Our established ETF range complements our UCITS fund offerings in Europe, giving clients access to PIMCO’s time-tested active fixed income management via whichever investment vehicle best suits their investment needs.”