Two years of client withdrawals at Pacific Investment Management Co.'s flagship have cost it the title of the world's largest bond mutual fund.
Investors pulled $5.6 billion 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 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 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 William H. Gross left on Sept. 26 for Janus Capital Group. The fund has advanced 1.4% this year, outperforming 78% of similarly managed funds, according to data compiled by Bloomberg.
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.
