Pimco launches Foreign Currency Strategy ETF
Pimco has launched the Pimco Foreign Currency Strategy Exchange Traded Fund (FORX), which aims to offer investors the potential to benefit from fundamental changes in global currency dynamics by diversifying away from the dollar.
The fund is jointly managed by Scott Mather (pictured), managing director and head of global portfolio management; Vineer Bhansali, managing director and head of quantitative investment portfolios; and Thomas Kressin, senior vice president and head of European foreign exchange.
Rising debt levels, limited fiscal flexibility and easy monetary policy in the US may weigh on the dollar for years. FORX is a portfolio of currencies and local currency bonds actively managed to help investors diversify out of the dollar and preserve their purchasing power. The active management is a notable difference for an ETF marketplace made up mostly of passive products in which investors generally must form their own views on individual currencies or currency indexes.
“The ongoing transition away from the dollar as the preeminent global reserve currency is continuing and many competing currencies increasingly offer better yields and long-term credit dynamics," says Mather. "FORX is a purer way to gain foreign currency exposure and also avoids the unwanted exposures that can come with holding indirect currency plays such as equities or commodities."
FORX continues the expansion and innovation of Pimco’s range of actively managed ETFs, which combine Pimco’s global investment process with the tradability of the ETF vehicle, providing investors with intraday pricing and daily portfolio disclosure in a single share class.
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