Gross Says New Currency ETF to Seek Emerging Market Gains

Bill Gross, co-chief investment officer of Pacific Investment Management Co., said the firm will seek to capture gains in emerging market currencies through a new actively-managed exchange-traded fund.

Economic growth in emerging markets “can be reflected in the currency space, which means you not only can earn a carry, or higher interest rate, but also hopefully the currency will appreciate,” Gross said today at the ETF Virtual Summit, an online conference for financial advisers hosted by ETF Trends, which provides industry research and analysis. Gross said he expects currencies in countries such as Mexico and Brazil to appreciate.

Pimco first disclosed in a regulatory filing in June 2011 that it plans to open the Foreign Currency Strategy ETF, which would invest at least 80 percent of assets in currencies or locally-denominated bonds issued outside the U.S. The fund, which will be managed by Scott Mather, could invest up to half its assets in securities economically tied to emerging market countries.

Mark Porterfield, a spokesman for Newport Beach, California-based Pimco, declined to comment on when the new ETF would be available to investors.

Mather runs the $9 billion Dublin-registered Pimco Global Bond Fund. (PIMGBII) The fund has beaten 74 percent of competing funds over the past three years, returning an annual average of 8.3 percent, according to data compiled by Bloomberg.

Gross manages the Pimco Total Return Exchange-Traded Fund (BOND), the world’s largest actively-managed ETF, which opened March 1 and holds $3.9 billion. Foreign Currency Strategy would be the firm’s seventh actively-managed ETF.

To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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