PIMCO’s Well-Diversified Multi-Sector Bond Active ETF Offers More Peace of Mind in a Nervous Interest Rate Environment

Nov 08, 2023
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PIMCO not-so-long-ago launched the bond ETF “PYLD”. The fund provides investors with diversified bond exposure and the expertise and stable performance for which PIMCO is known.

The Multi-Sector Bond Active ETF (PYLD) offers diversified exposure to bonds with an SEC yield of 5.6%. Most other PIMCO bond ETFs have handily outperformed their benchmarks since launch, and PYLD seems likely to do the same.

The fund invests in most relevant bond and bond sub-asset classes, including government bonds, MBS, corporate bonds, leveraged loans and senior loans. The fund currently invests in 442 different names and durations. Importantly, PYLD invests in both investment-grade bonds and high-yield bonds, whereas most bond ETFs focus on one or the other. PYLD's underlying assets have a wide range of credit ratings, ranging from AAA to B (nominally invested in CCC). The moderate rating is A and the mode is BBB. PYLD is subject to interest rate risk and has an average maturity of 9 years.