Making a MINT with Active Management

Note: This is the first in a series of the biggest actively managed exchange-traded funds (ETFs).

The PIMCO Enhanced Short Maturity Active ETF (NYSEARCA:MINT) is a low-cost, actively managed fund that seeks higher current income than the average money market mutual fund by holding a hodgepodge of high-quality and ultra-short-term U.S. dollar-denominated debt from domestic or foreign issuers.

The fund, which aims to keep its average duration under one year, targets only investment-grade securities. Aside from U.S.-based debt, investors also gain exposure to U.S. dollar-denominated securities from developed countries and emerging markets.

Liquidity-wise, it doesn’t get much better than MINT in the fixed-income space. The fund trades in high volumes and its block liquidity is great. Its expense ratio is reasonable, and the fund has quickly amassed sizable assets, making it one of the most successful actively managed ETFs ever launched.

As you can see in the five-year chart below, this fund has experienced an incredible uptrend over recent years. Even with the recent overall market correction, MINT has almost recovered all that it had lost due to the pandemic, demonstrating its resilience and how well managed it is.

Chart courtesy of www.stockcharts.com

The exchanged-traded fund has $12.8 billion in assets under management, 742 holdings and an average spread of 0.01%. Its expense ratio is 0.36%, indicating that it is inexpensive to hold relative to other ETFs. MINT trades around $100 a share, and it has a distribution yield of 1.94%.

MINT is designed to provide clients with capital preservation, liquidity and stronger return potential relative to traditional cash investments in exchange for a modest increase in risk. It also provides diversification and downside risk mitigation in volatile markets, with little exposure to interest rate risk. The fund also offers access to PIMCO’s veteran liquidity management team, as well as an extensive credit research process to source what are believed to be the most attractive securities.

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In short, MINT is an actively managed fund that provides greater income and total return potential than money market funds by investing in short-term debt securities. However, investors are, as always, urged to conduct their own due diligence in deciding whether or not this fund fits their own individual investing and portfolio goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.