PIMCO Fund Termination
PIMCO Canada Announces Termination of Climate Bond Fund Effective August 2026
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PIMCO Canada Corp. will shut down the PIMCO Climate Bond Fund (Canada) on or about August 28, 2026, the company announced on June 15. The Fund is already closed to new purchases. Investors have until the termination date to redeem their units for cash or switch them into another PIMCO Canada mutual fund. Owen Sound Sun Times reported the closure via a formal press release distributed to all unitholders.
The Fund held roughly CAD 23 million in total net assets as of May 31, 2026, according to The Province. That is a fraction of the CAD 76 million held in PIMCO's broader ESG Income Fund (Canada). The daily net asset value stood at CAD 9.02 as of June 11, 2026.
A Small Fund That Never Found Its Footing
PIMCO launched the Climate Bond Fund in February 2021, at the height of the ESG investing boom. The fund aimed to deliver strong returns by focusing on climate-related risks and opportunities in fixed income markets. But it never scaled up. At CAD 23 million in assets, it stayed far smaller than PIMCO's other Canadian funds, according to The Sudbury Star.
The fund's management expense ratio was 1.40% for Series A units. It was managed by a four-person team: Grover Burthey, Jelle Brons, Regina Borromeo, and Samuel Mary. Despite the team's credentials, the fund struggled to attract significant investor capital in an increasingly crowded and skeptical ESG marketplace, according to Chatham Daily News.
ESG Investing Cools as Interest Rates Stay High
The closure fits a larger pattern. New sustainable fund launches in Canada dropped sharply — from 18 in 2024 to just two in all of 2025, according to Morningstar research cited by Fort McMurray Today. High interest rates hurt climate-specific bond strategies. Investors shifted toward funds offering better yield and more flexibility.
"In 2021, you could market a climate bond fund on the premise of the 'greenium,'" said Thanh Nguyen, a portfolio manager at Vanguard — referring to the yield discount investors once accepted for green bonds. "In 2026, investors want liquidity and yield, not niche thematic constraints." Regulatory pressure also played a role. Canada tightened its Competition Act in 2025, raising the legal bar for funds using the word "climate" in their name, according to Edmonton Examiner.
PIMCO Signals a Shift Toward Core Fixed Income
Just days before the closure announcement, PIMCO leadership published a report called "Secular Outlook: Rupture and Resilience." It called for a focus on "high-quality fixed income" and "diversified credit" to navigate what it described as "fractured alliances and fiscal strain." The report was co-authored by Richard Clarida and Andrew Balls, according to Cold Lake Sun.
Group CIO Daniel Ivascyn noted that "elevated yields are creating compelling opportunities" but warned that markets must now reward "sector discipline" over speculative thematic labels. Analysts say capital from the Climate Bond Fund is likely to flow into larger PIMCO products like the Monthly Income Fund. PIMCO's broader ESG Income Fund, with CAD 76 million in assets, appears well-positioned to absorb climate-conscious investors, according to Daily Herald Tribune.
What Investors Must Do Before August 28
Unitholders face a key choice before the Fund closes. They can redeem their units for cash, but doing so may trigger a taxable capital gain. PIMCO is encouraging investors to switch into another series of a PIMCO Canada mutual fund instead. A switch avoids an immediate tax hit, according to Mitchell Advocate.
Investors who do nothing will have their units terminated on or about August 28, 2026. PIMCO will notify each unitholder directly. Those who want to move to a climate-focused fund from another provider — such as CIBC or Dynamic — will need to redeem first and accept the tax consequence. The deadline leaves about 10 weeks for investors to decide, according to The Whig.
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