PIMCO May Loose 'World's Largest' Title For Bond Fund

The title of world's largest bond mutual fund could soon be changing hands, according to a report Friday. Current title-holder Pacific Investment Management Co.'s Total Return fund

is teetering, with withdrawals of $7.3 billion in March, The Wall Street Journal reported. That leaves the PIMCO fund with $117.4 billion, while Vanguard Total Bond Market Index fund

held assets of $116.4 billion, excluding an ETF share class. Vanguard "will have to wait at least another month before it can claim the world's largest bond mutual fund," according to the report. PIMCO, a unit of Allianz SE

may have seen its fortunes turn with the departure of star manager William Gross in September. Vanguard is benefiting from an increasing preference among investors for index-based funds over those that are actively managed. So-called passive funds have seen a consistent inflow of funds since 2004, according to Morningstar's John Rekenthaler. http://news.morningstar.com/articlenet/article.aspx?id=691097 Vanguard has "developed a reputation as a fund manager that takes unusually good care of its shareholders," Rekenthaler said Thursday. But Rekenthaler added that "somebody who fully trusts a fund-industry leader is somebody waiting to be fleeced."