After months of talk, one of the most exciting launches yet in the exchange traded fund (ETF) business is set to happen today: Pacific Investment Management Co. (PIMCO) is now an ETF provider.

PIMCO is the leader in fixed-income management, so it’s fitting that their first offering  is the PIMCO 1-3 Year U.S. Treasury Index Fund (TUZ), which focuses on low-yielding short-term Treasuries. The launch is especially exciting, because it’s going to go head-to-head with the grandfather of Treasury ETFs, iShares Barclays 1-3 Year Treasury Bond (SHY).

PIMCO recognizes that competition is fierce, but they are also sensitive to the fact that current yields are close to historic lows. To lure those looking for a strong fixed-income brand name at a reasonable price, the fund will have a 0.09% expense ratio after waiving a portion of the fees for at least a year. That’s less than any other bond ETF tracked by Morningstar, notes Ian Salisbury for The Wall Street Journal. SHY’s expense ratio is 0.15%.

Full Story: http://www.etftrends.com/2009/06/pimco-enters-etf-business-bang.html

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ETF BASIC NEWS, TUZ