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PIMCO issues first actively managed fixed income ETF in Euroclear’s international structure


PIMCO has launched the first actively managed fixed income ETF – The PIMCO Low Duration US Corporate Bond Source UCITS ETF – in Euroclear Bank’s international structure. 

The ETF has listed on the London Stock Exchange, and its primary market issuance will be in Euroclear Bank, the International Central Securities Depository (ICSD). Additionally, transaction settlement – both OTC and on-exchange – will take place within the ICSD structure, providing far greater simplicity and reduced risk and processing costs. Moreover, local CSDs can also provide posttrade services for such internationally-structured ETFs via their respective link with Euroclear Bank.

“We are delighted to be working with Euroclear to make available international settlement for our active PIMCO Low Duration US Corporate Bond Source UCITS ETF”, says Howard Chan, ETF product manager. “PIMCO is known as an innovator offering value-added ETFs through active and smart beta strategies. This step continues that spirit of innovation to improve European ETF trading dynamics.”

Stephan Pouyat, Global Head of Capital Markets at Euroclear, says: “PIMCO is embracing more efficient post-trade processing, circumnavigating the need for time-consuming realignments and extra inventory buffers when buying an ETF in one domestic market, and selling it on in another. As a result of issuing in this international format, bid/offer spreads are expected to tighten considerably, which should drive greater investor interest in ETFs across Europe and beyond.”

Firms investing in this asset class benefit from greater levels of settlement efficiency, afforded through a longer intraday settlement window and the deep pool of international clients that are part of Euroclear’s securities settlement lending programme.

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