(Bloomberg) -- Smaller bond funds have an advantage over bigger ones in illiquid markets: They’re more nimble.

See Pacific Investment Management Co.’s Total Return exchange-traded fund. It purports to follow the same strategy as the firm’s $229 billion flagship Total Return mutual fund, yet the $3.4 billion ETF’s returns are more than 6 percentage points better during the last two years. Both are managed by the firm’s billionaire co-founder, Bill Gross.

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