PIMCO’s EARN ETF helps lift short-term yield fund to A$239.8 million

EARN launch drives sharp fund expansion

PIMCO Short Term Active Yield Fund’s net assets climbed to A$239.761 million at 30 June 2026, up from A$30.403 million a year earlier, following the launch of its exchange-traded ETF class on ASX under the ticker EARN. The fund began offering the ETF class on 7 October 2025, adding a third unit class to the existing Class Z and Wholesale Class.

Applications were the main engine of the expansion. The fund received A$220.593 million in unit applications during the year, including A$22.2 million for the ETF class and A$198.453 million for the Wholesale Class. Redemptions totalled A$12.721 million. The Wholesale Class ended the year with A$187.733 million in net assets, while the ETF class closed with A$20.361 million.

Returns exceeded the cash-rate benchmark

The fund reported net performance of 4.81% for Class Z and 4.52% for the Wholesale Class, compared with a 3.91% return for the Australia RBA Cash Rate Target Index. The ETF class returned 3.11% net, but that figure covers nine months from its inception rather than the full financial year, making it unsuitable for a direct comparison with the other two figures.

The portfolio generated A$4.694 million of investment income, including A$3.132 million of interest income from assets held at fair value and A$1.179 million of net gains on financial instruments at fair value through profit or loss. After A$209,000 of expenses, operating profit was A$4.485 million. The fund distributed A$4.603 million during the year, with A$1.448 million payable at 30 June.

Fixed-income portfolio carries larger derivatives footprint

Fixed-interest securities accounted for A$218.837 million of the fund’s A$220.537 million in financial assets held at fair value. The fund also held A$1 million of derivative assets against A$1.993 million of derivative liabilities. Derivative notional exposure increased to A$269.140 million, from A$26.861 million a year earlier, largely reflecting the fund’s much larger asset base and its use of foreign-currency contracts, swaps and futures.

The fund says derivatives are used for hedging, substituting for physical securities and adjusting duration or currency exposure, rather than to gear the portfolio. Its debt securities were investment grade, with 34% rated AAA, 19% AA, 34% A and 13% BBB at year-end. The reported one-month, 99% confidence Value at Risk was A$623,000, or 0.260% of net assets, compared with A$112,000, or 0.370%, a year earlier. The filing cautions that this measure does not capture liquidity risk, counterparty risk or extreme credit events such as issuer default.

Clean audit leaves flows and ETF execution in focus

PricewaterhouseCoopers gave the annual report an unmodified audit opinion. The auditor identified the valuation of investments as a key audit matter because those holdings represent most of the fund’s assets and changes in their value flow through performance. PwC said it tested custody records, market prices and selected derivative valuations.

The next test is less about the fund’s launch headline than the durability of its distribution reach. EARN’s nine-month return provides an early reference point, but the annual report does not establish how its asset base, trading liquidity or benchmark tracking will develop through a full market cycle. The fund also notes that future returns are not guaranteed and may differ from past performance.