PIMCO has cut the fee of its emerging markets local currency fixed income ETF by over a third.
It means the total expense ratio (TER) on the PIMCO Emerging Markets Advantage Local Bond Index UCITS ETF (EMLB) will be reduced from 0.60% to 0.39%.
This makes it the second cheapest in Europe after the VanEck J.P. Morgan EM Local Currency Bond UCITS ETF (EMLC), which has a total expense ratio (TER) of 0.30%.
It now undercuts the UBS ETF J.P. Morgan EM Multi-Factor Enhanced Local Currency Bond UCITS ETF (EMLB) by one basis point.
Launched in 2014, EMLB tracks the PIMCO Emerging Markets Advantage Local Currency Bond index which captures local government debt with countries weighted by GDP, with exposure capped at 15% per country.
Commenting on the fee cut, a spokesperson from PIMCO said: "PIMCO periodically reviews its product offering and makes changes where appropriate to meet the diverse needs of our clients.”
ETF issuers have regularly reduced fees in Europe over the last year and a half – with Amundi being the latest example – cutting the fee of 33 ETFs in June which included its $12.5bn S&P 500 ETF.
Following Russia’s invasion of Ukraine, PIMCO introduced the option to implement side pockets – a tool used to carve out a fund’s highly illiquid assets – on fixed income ETFs that were exposed to Russian sovereign debt, which included EMLB.
