(Bloomberg) -- Two years of client withdrawals at Pimco's flagship have cost it the title of the world’s biggest 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 Newport Beach, Calif.-based 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 Valley Forge, Pennsylvania-based 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 Bill Gross left on Sept. 26 for Denver- based Janus Capital Group Inc. The fund, now run by Mark Kiesel, Scott Mather and Mihir Worah, has advanced 1.4% this year, outperforming 78% of similarly managed funds, according to data compiled by Bloomberg.
Gross, who co-founded Pimco in 1971 and built it into one of the world’s largest investment firms, departed after losing a power struggle with senior executives. He now runs the $1.5 billion Janus Global Unconstrained Bond Fund.
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.
