PIMCO launches their first ETF

PIMCO (Pacific Investment Management Co.) is famous for Bill Gross, one of the co-founders and his storied successes. Now they've launched their first ETF, stock symbol TUZ. Additional ETFs planned by them in the future. For the first 2 years, their expenses are 0.09% (current average of other ETFs is 0.16%), then will go up after.

Click here for the ETFguide.com story on Yahoo! Finance.

Remember that for ETFs, it's not necessarily the annual expenses that will erode your return, it will be the commissions. For example, even if you could buy a position using a broker with a $4 commission on a trade, even a $10,000 trade would be about 0.04% hit on return (if held one year) just to get in. There will be another hit when you exit the position.

Remember: The benefits of an ETF trade need to outweigh the risks and costs. Some of the potential benefits are: ability to enter/exit at anytime the market is open (most Mutual Funds are business end), leverage/margin, shorted, and maybe hedged with options (if a market is created). The only issue with options is that some of these option markets for ETFs are not very liquid.