From an interview on Bloomberg TV, Bill Gross talks about why PIMCO is introducing a new ETF next week that will mimic the Total Return Fund:

That is a complicated answer, but technically the fees are the expenses on an annual basis are less on the Total Return Fund that now exists versus the ETF. There will be a slight difference, but of course you don’t pay the all-in retail fees and you could make the argument that it’s a lot cheaper as an alternative.  The ETF is limited to the extent it can’t use futures and optional types of securities that have been successful with the Total Return Fund. Basically they will be the same. We are excited to provide the same types of returns for that ETF as we do for the Total Return Fund and allow individual investors to buy it on the New York Stock Exchange. We do not suggest they trade it, but we think they can buy it at 10:30 in the morning, as opposed to the market closing and have a great longer-term performance record.

So the funds are basically the same, the ETF will be cheaper and you can trade it throughout the day.  Kind of sounds like the future.

You can watch the entire video at Bloomberg.com.

Update:  The Economist on the threat of actively managed ETFs to the traditional mutual fund industry.