PIMCO’s Total Return Fund has lost its title of the world’s largest bond mutual fund to Vanguard after suffering 24 consecutive months of outflows.
According to the Newport Beach, California-based firm’s most recent data, its flagship fund lost $5.6 billion in April, shrinking its total assets down to $110.4 billion.
PIMCO’s fund fell behind rival Vanguard’s Total Bond Market Index fund, which reported $117.3 billion under management as of April 30, according to the firm’s preliminary data.
Vanguard’s spokesperson said the fund has “benefited from a diverse base of long-term shareholders” that are drawn to the fund because it “provides broad diversification to the bond market at a low cost.”
Clients have pulled more than $110 billion from PIMCO’s fund since its peak of $293 billion two years ago.
In December 2013, after the fund suffered its seventh consecutive months of outflows, then-CIO Bill Gross said the firm had plans to reposition the portfolio to secure its number one spot.
“We have positioned our bond wars portfolio—heavily front-end maturity loaded along with credit, volatility, and curve steepening positions, with the aim of outperforming Vanguard as well as many other active managers,” the bond king said in an investment outlook.
The Total Return Fund hemorrhaged a record $27.5 billion in withdrawals last October, when Gross exited the firm. Outflows peaked the day Gross left, PIMCO said, at an estimated $8 billion.
The fund is now run by CIOs Scott Mather, Mark Kiesel, and Mihir Worah and returned 1.62% net-of-fees for year-to-date through April. Total Return also outperformed its benchmark by 38 basis points, PIMCO said.
Gross now manages a $1.5 billion global unconstrained bond fund for Janus Capital.
Related Content: Gross’ Game Plan for Tackling Vanguard; Fade to Black; PIMCO Flagship Suffers Record Outflows Post-Gross