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Bond Fund PIMCO May Lose 'World's Largest' Title

Bond Fund PIMCO May Lose 'World's Largest' Title

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 (MUTF:PTTRX) 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's Total Bond Market Index Fund (MUTF: VBMFX) 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 (OTC: AZSEY), may have seen its fortunes turn with the departure of star manager Bill Gross to Janus Capital Group Inc (NYSE: JNS) in September.

Related Link: 3 Things To Know From Bill Gross' March Investment Outlook

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.

Vanguard has "developed a reputation as a fund manager that takes unusually good care of its shareholders," Rekenthaler said Thursday.

But Rekenthaler added, "Somebody who fully trusts a fund-industry leader is somebody waiting to be fleeced."

Posted-In: Bill Gross John Rekenthaler morningstarAnalyst Color News Bonds Markets Analyst Ratings Best of Benzinga


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