2024-06-13 17:49:31 ET
Summary
- ZROZ ETF is a long-term zero-coupon bond vehicle managed by PIMCO, which has shed nearly 15% of its value in the past year.
- We believe the volatile interest rate environment makes this long-duration bond vehicle unattractive.
- A rising term premium and liquidity worries might dampen ZROZ's pricing and dividend-based prospects.
- Our calculations show that ZROZ has a negative Sharpe Ratio, likely induced by high short-term bond yields.
- In essence, we think risk-adjusted, ZROZ's risk-return profile is unaligned for now.
The bond market is as exciting as it has ever been, especially for those seeking active returns. By looking at the asset class, our latest observation includes the PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund ETF ( ZROZ ) , a long-term zero-coupon bond vehicle managed by the renowned PIMCO....
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For further details see:
ZROZ ETF: Better Staying On The Sidelines For Now