PIMCO’s Hidden Gem: LONZ ETF Outperforms with Low Volatility in 2022 – Must-Read Analysis

New York, NY – PIMCO, a prominent asset management firm known for its strong fixed income offerings, has recently introduced a new exchange-traded fund focused on leveraged loans. The PIMCO Senior Loan Active Exchange-Traded Fund ETF (NYSEARCA:LONZ) is gaining attention in the financial markets for its active approach to managing its portfolio.

LONZ, launched in 2022 in response to rising interest rates, aims to outperform the iBoxx USD Liquid Leveraged Loans Index by leveraging PIMCO’s extensive research capabilities to select high-quality credits. With a diversified portfolio of over 270 names and an average yield to maturity of 9%, the fund primarily focuses on single-B rated credits.

One of the standout features of LONZ is its low volatility profile, with a standard deviation of 2.28 and annualized volatility of 1.95%. This stability is attributed to the nature of leveraged loans, which typically have a first lien on company assets, providing a higher likelihood of recovery in case of issuer default.

Active management by PIMCO has proven to be a key factor in LONZ’s outperformance compared to its peers like the Invesco Senior Loan ETF (BKLN) and the First Trust Senior Loan ETF (FTSL). The fund has delivered impressive returns of over 11% with an annualized volatility of only 2%, showcasing the benefits of active fund management in today’s market environment.

Investors are encouraged to consider LONZ’s track record of beating the index and its relatively low fees compared to the value it provides. As the fund continues to outperform expectations, it remains a compelling option for those seeking exposure to the leveraged loan market with the expertise of a reputable asset manager like PIMCO.

In conclusion, LONZ presents an attractive opportunity for investors looking to capitalize on the strengths of PIMCO’s active management strategy in the fixed income space. With its focus on higher-quality credits and impressive performance track record, the fund stands out as a promising option for investors seeking stability and growth in their portfolios.