Bill Gross, co-founder and co-chief investment officer of Pimco, adjusts his sunglasses as he arrives to speak at the Morningstar Investment Conference in Chicago, Ill., in this file photo taken June 19, 2014.JIM YOUNG/Reuters
Two years of client withdrawals at Pacific Investment Management Co.'s flagship have cost it the title of the world's biggest bond mutual fund.
Investors pulled $5.6-billion (U.S.) from the Pimco Total Return Fund in April, after redemptions of $7.3-billion in March and $8.6-billion in February, according to estimates from the Newport Beach, California-based firm. With assets of $110.4-billion, the fund fell behind the index-tracking Vanguard Total Bond Market Index Fund, which had $117.3-billion as of April 30, according to preliminary data.
Vanguard's fund "has definitely benefited from a diverse base of long-term shareholders," said Katie Henderson, a spokeswoman for Valley Forge, Pennsylvania-based Vanguard Group. "We have advisers, institutions, and individuals who use this really as a core long-term holding."
Pimco has suffered more than $110-billion of outflows from the fund, which reached a peak of $293-billion in April 2013, since longtime manager Bill Gross left on Sept. 26 for Denver- based Janus Capital Group Inc. The fund, now run by Mark Kiesel, Scott Mather and Mihir Worah, has advanced 1.4 per-cent this year, outperforming 78 per-cent of similarly managed funds, according to data compiled by Bloomberg.
Mr. Gross, who co-founded Pimco in 1971 and built it into one of the world's largest investment firms, departed after losing a power struggle with senior executives. He now runs the $1.5-billion Janus Global Unconstrained Bond Fund.
Vanguard also runs an exchange-traded fund version of the Total Bond Market strategy, which holds $27-billion in assets. The firm's ETFs are run as share classes of mutual funds, a structure Vanguard patented.