The actively managed fund delivered 10% returns over one year, surpassing passive bond index funds amid higher yields and tactical sector shifts.
PIMCO’s Multi Sector Bond Active ETF (PYLD) posted a 10% return over the past year, exceeding passive peers like Vanguard’s BND and iShares’ AGG by 400 basis points. The fund’s 5.9% yield also topped the 10-year Treasury’s 4.6%, driven by active management across 1,937 securities, including sovereigns, mortgage-backed securities, and high-yield debt.
Passive bond index funds have struggled in an environment where rate-decline assumptions failed, while PYLD’s tactical sector rotation and underweighting of long-duration assets contributed to its outperformance. However, the strategy carries concentrated credit risk and charges significantly higher fees than passive alternatives.
PYLD has attracted $8.07 billion in net flows over the past year, pushing its assets near $20 billion as income investors seek alternatives to stagnant passive bond funds.