PIMCO and Source, the two firms which recently partnered to introduce and distribute fixed income ETFs in the European market, have launched the first new funds in their range.

The firms have listed the PIMCO Euro Enhanced Short Maturity Source ETF and the PIMCO European Advantage Government Bond Index Source ETF on the Deutsche Börse, and the PIMCO US Dollar Enhanced Short Maturity Source ETF on the London Stock Exchange.

The PIMCO Euro Enhanced Short Maturity Source ETF and the PIMCO US Dollar Enhanced Short Maturity Source ETF have been developed in response to the low interest environment, the firms said. They are actively managed by PIMCO in the short-term fixed income space. In terms of transparency, investors can see the bond holdings of the fund on a daily basis.

The PIMCO European Advantage Government Bond Index Source ETF seeks to provide the performance of the PIMCO European Advantage Government Bond Index, a GDP-weighted benchmark tracking investment-grade, euro-denominated government bonds in the eurozone. The methodology used, according to PIMCO, produces an index with higher weights for less indebted countries.

“Traditional bond indices - by virtue of their market capitalisation weighting methodology - have an inherent bias towards economies with high levels of debt. As concerns about sovereign creditworthiness become more critical to asset allocation, there is genuine need for an alternative,” the two firms said in a statement. As with the other funds, investors can see the ETF’s holdings on a daily basis.

All three funds are domiciled in Ireland and the US dollar and euro enhanced funds have a management fee of 0.35 per cent, while the European advantage fund has a management fee of 0.3 per cent.