In a move that could shake up the clubby business of exchange-traded funds, bond giant Pacific Investment Management Co. is poised to launch its first ETF early this week.
The move by Pimco, a unit of Allianz
SE co-founded by bond guru Bill Gross, marks the first time in years such a high-profile mutual-fund company has tried to muscle its way into the ETF business, long dominated by a handful of large-but-lesser-known asset managers that specialize in indexing, such as Barclays PLC and State Street
ETFs, baskets of stocks or bonds that trade on an exchange, have been rapidly gaining popularity with investors, and took in tens of billions of dollars in 2008. But many big-name mutual-fund companies have shrugged off ETFs because these offerings were traditionally just index funds with low management fees, which ensured that profit margins were measly.