PIMCO launched the first of three bond ETFs targeting individual countries. The PIMCO Australia Bond Index Fund (AUD) was introduced for trading and it will follow investment grade debt from Australia.
AUD is linked to the performance and yield of the BofA Merrill Lynch Diversified Australia Bond Index. The bond benchmark tracks Australian dollar denominated investment grade bonds from publicly issued in the Australian domestic market, including sovereign, corporate, securitized, and collateralized securities.
As of Sept. 30, 2011, there were 212 issues in AUD’s underlying index. Qualifying bonds for index inclusion must have an investment grade rating. AUD charges net annual expenses of 0.45 percent.
PIMCO is planning to launch the PIMCO Canada Bond Index Fund and the PIMCO Germany Bond Index Fund soon.
Australia, Canada and Germany currently have some of the strongest balance sheets among developed nations. Australia is one of the world’s largest exporters of commodities. •