LONZ Profile
The PIMCO Senior Loan Active Exchange-Traded Fund is designed to provide investors with exposure to a diversified portfolio of senior loans, which are typically secured loans issued by corporations with higher credit risk. The fund aims to achieve its investment objective by allocating at least 80% of its assets to senior loans, including those represented by various financial instruments such as forwards, options, futures contracts, and swap agreements. This strategy is intended to capitalize on the income potential and credit characteristics of senior loans while managing risk through diversification.
Senior loans, also known as leveraged loans, are debt instruments that rank higher in the capital structure of a borrower, which generally provides greater protection in the event of default. The fund’s investment approach involves selecting loans based on their credit quality, yield, and potential for capital appreciation. By focusing on senior loans, the fund seeks to offer higher yields compared to traditional investment-grade bonds while mitigating some of the risks associated with lower-ranked debt.
The fund’s average portfolio duration is designed to remain within one year of the duration of the securities comprising the Markit iBoxx USD Liquid Leveraged Loan Index, a benchmark that tracks the performance of U.S. dollar-denominated senior loans. This duration management strategy helps to align the fund’s interest rate sensitivity with that of the index, aiming to minimize the impact of interest rate fluctuations on the fund’s performance. The fund’s active management allows for adjustments in response to changing market conditions and credit environments.
Managed by PIMCO, a leading global investment management firm with extensive expertise in fixed-income and alternative investments, the fund benefits from the firm’s robust research capabilities and investment strategies. PIMCO's seasoned team applies its in-depth credit analysis and market insights to manage the fund’s portfolio, seeking to optimize returns while managing risk. The PIMCO Senior Loan Active Exchange-Traded Fund is tailored for investors seeking exposure to senior loans with an emphasis on income generation and capital preservation.
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