Has anyone noticed that Pimco, as of yesterday, is offering (now higher-yielding, lower-priced) short-term U.S. Treasuries at an expense ratio of 9 bps (0.09%)? Hougan notes that the new fund (NYSE Arca: TUZ) traded 300,000 shares on its first day, and I expect it'll be trading a lot more than that. Pimco's got BRAND in fixed income, and the forthcoming launch of six more ETFs (along with all sorts of other plans) indicates that it is just dipping its toes in the ETF market so far ... and is planning to jump into the pool in a big way (liquidity, transparency).

That, to me, is very, very cool. (See related IU.com story that broke the news of Pimco's original plans to enter the ETF market here. You can also see how they revised those plans, leading to the eventual launch of TUX, here.)

We've got the cheapest bond ETF in the world right now coming out of Pimco, and it's an index fund of the most liquid and desirable safe haven in the world: U.S. Treasuries. Seeing as though the fund is coming from Pimco, my guess is that it will trade and track well. I will note that while the fund is priced at 9 bps now, there is a 13 bps waiver up to 22 bps. I have no idea if the intention is to keep TUZ at 9 bps forever, or if Pimco will let it expire after the two-year fee waiver sunsets.

The other issue that's of interest is whether Pimco will expand out into the active space, and into the less liquid spaces of the fixed-income business that are less conducive to lean creation and redemption baskets in terms of tracking. The Vanguard share class structure would sure seem to be JUST the thing for that. I don't know if we'll be seeing the Pimco people license Vanguard's IP there, but then again the idea of that being patented just strikes me as anti-competitive (and you know that despite our Fidelity company retirement plan, we love the Vanguard guys).

A couple other things of interest: Jason Zweig takes on the share-lending racket, with a focus on the ETF business and how different fund managers treat the share lending revenue differently even while the fund bears all the risk. Read the article here.

Also, for the Peter Schiff disciples out there, I posted a fun blog on the IndexUniverse.eu site showing Peter's genius (and his disastrous investment results. You can read that here: Being Right Isn't The Same As Making Money.