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ETF Specialist

Once Again on Top

PIMCO's Enhanced Short Maturity ETF has taken the top spot in the ranks of active ETFs from its sibling, PIMCO Total Return ETF, as investors have looked to reduce interest-rate risk.

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On Sept. 3, 2013, a deposed monarch was crowned again. Few took notice, as his domain is the still tiny realm of actively managed ETFs. On that day,  PIMCO Enhanced Short Maturity ETF (MINT) unseated its younger sibling,  PIMCO Total Return ETF (BOND), to retake its throne as world's largest actively managed ETF.

Though a minor drama, it's part of a bigger movement by investors to reduce their bond-duration risk. Ben Bernanke kicked off the process when he mentioned during a question-and-answer session that the Fed might "taper" its bond purchases later in the year (which didn't happen). The news that Uncle Ben's helicopter drops of money might slow down earlier than expected sent investors stampeding out of bonds. Faced with capital losses on rising rates and zero yields in cash, some have compromised by piling into ultra-short-duration bond funds, until recently a sleepy backwater of the fund world.

Samuel Lee does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.