Charles Schwab has removed the PIMCO Total Return Fund as an underlying investment in its 10 target-date funds, spokeswoman Alison Wertheim said.
Ms. Wertheim said in an e-mail the change was made because of organizational changes at PIMCO. The search for a replacement fund has begun, she said, and assets are temporarily reallocated to the Schwab Total Bond Market Fund and Loomis Sayles Investment Grade Bond Fund.
The company also removed PIMCO as a “separate account manager in the Schwab Institutional Core-Plus Fixed Income Trust Fund, in which The Schwab Managed Retirement Trust Funds invest,” Ms. Wertheim said in a separate e-mail.
The PIMCO Total Return Fund as of April 30 was one of the top 10 holdings in six of Schwab’s target-date funds, according to Schwab’s website.
The Schwab Target 2030 Fund had the most exposure to PIMCO’s flagship fund, with $41.7 million of the target-date fund’s $726 million in assets. The 10 target-date funds have a combined $2.85 billion in assets as of Aug. 31.
It is believed to be the first high-profile termination of Pacific Investment Management Co. following the resignation of co-founder and Chief Investment Officer William H. Gross on Sept. 26.
