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Pimco launches Intermediate Municipal Bond Strategy Fund

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Pimco, a global investment management firm, has launched the Pimco Intermediate Municipal Bond Strategy Fund, an actively managed exchange-traded fund.

The fund accesses Pimco’s municipal bond expertise in building a portfolio of primarily high-quality, intermediate maturity, AMT-free municipal bonds whose income is exempt from federal and, in some cases, state tax.

The ETF will be managed by John Cummings (pictured), executive vice president and head of Pimco’s municipal bond desk.

"The US fiscal outlook will likely include higher marginal tax rates in the years to come, raising the need for tax-efficient investments. At the same time, however, municipalities and states face a host of challenges in managing their budgets, so the importance of credit analysis is heightened," says Cummings. "With MUNI, Pimco aims to provide investors with a carefully selected, diversified portfolio of municipal bonds with the complete transparency and accessibility of an ETF."

Unlike index funds that may rely solely on ratings agencies for credit analysis, Pimco analyses each municipality’s ability to pay obligations, collect taxes, benefit from federal stimulus and other factors, along with a detailed evaluation of each issue’s structure before a decision is made to purchase a security.

The fund is part of an effort to broaden access to Pimco’s investment process and risk management by offering strategies and vehicles that appeal to a wide range of investor preferences.

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