Text on screen: Introducing the PIMCO Short Term Active Yield Active ETF (Ticker: EARN)
This video is an excerpt from a live webinar recorded on 23 October 2025.
Text on screen: What is the EARN ETF and how does it work?
Adam Bowe: It's a strategy that targets 75 to 125 over the cash rate. So, we need to take some element of risk in the portfolio to get that performance objective.
Text on screen: Adam Bowe, Head of Australia Portfolio Management
The dominant risk factor there that we will be utilising is credit. So, what does that look like?
So, it's a very high-quality portfolio. You can see it's investment grade only, and it's very diverse across geographies and sectors.
Text on screen: Kanish Chugh, Head of ETF Sales
So, up to 50% can be held in markets offshore, think of that being financials and corporates, of course, but then securitised assets and AAA-rated RMBS and auto loans around the world, government T-bills, and liquid money market instruments.
So, a broad range of instruments to generate that 75 to 125 over the cash flow through cycles.
Text on screen: What makes EARN different from other short-term funds?
Bowe: I think the biggest differentiating factor is the diversified source of income. You know, this isn't a concentrated bet on a sub-sector within the Australian fixed income market. It is not a concentrated bet on financials. This really is a globally diversified portfolio of high-quality investment grade generating assets. So, that's the biggest thing.
So, why is that important? First of all, certainly as an investment manager, that plays to our strength. We have a very large global platform and global resources as a firm.
So, we've got trade floors across the world that are kind of everyday portfolio managers and traders like me, scouring for opportunities and cheap assets to high-quality assets to have in portfolios like this. So, that global diversity allows us to flex into the core strengths that PIMCO can provide clients.
It also allows us to manage volatility through time.
Then the third benefit of the global diversity is the liquidity bumps. This is a daily liquid portfolio. It's now listed on the ASX as well. Utilising pockets of liquidity around the world in different markets, different currencies, different sectors of the global fixed income market really gives us the confidence to have that daily liquid structure within this fund.
Text on screen: Why invest in the EARN ETF now?
Bowe: The key themes – and our client base would be really conscious of this – is just the elevated levels of uncertainty and volatility in financial markets, and the implications it has for investors.
So, the starting point for us is, as global bond managers, it's a great time to be a global bond manager.
Starting yields are high, yield curves are steep, there's macro and financial market volatility for active managers to take advantage of.
So, whether or not you want to add a lot of interest rate risk into a core product, whether you're sort of incrementally stepping out from term deposits and cash into a product like a short-term fund here, the opportunity set is really attractive in starting yields.
So, a really great time to be launching this style of product but, more broadly, a great time to be an active fixed income manager globally.
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