Pimco Total Return Fund loses its title as the world's biggest bond mutual fund

Emma Haslett
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Gross' departure caused outflows in Pimco's Total Return Fund to spike (Source: Getty)

Pimco's Total Return Fund - the fund famously run by "bond king" Bill Gross until he stepped down from the company he founded last year - has lost its title as the world's biggest bond fund.

Pimco said the fund experienced outflows of $5.6bn (£3.7bn) last month, pushing its total assets down to $110.4bn, down from its record of $292.9bn in April 2013. That means Vanguard's Total Bond Market Index Fund, which has $117.3bn of assets, is now the world's largest bond fund.

April marked the fund's 24th consecutive month of outflows, Pimco confirmed, despite the fact it delivered a net after fee return of 1.62 per cent over the past four months, outperforming its benchmark by 3.8 percentage points.

Last week, Pimco announced the appointment of former Federal Reserve chief Ben Bernanke as an adviser, who will "contribute his economic expertise and insights into the firm's investment process".

In September, Gross announced his unexpected move to rival Janus Capital. The sudden departure of Gross, who co-founded Pimco, caused investors to flee, with $23.5bn of outflows in the week after he left. Since Gross' departure, investors have withdrawn $130bn from Pimco's open-ended funds - although outflows from its Total Return Fund have slowed to somewhere between $7bn and $8bn.

Gross wasn't the only one to step down. In January, his right-hand man, Mohammed El-Erian, stepped down, saying his daughter had persuaded him to leave by writing down 22 important life events he had missed. In February this year. Paul McCulley, Pimco's managing director and chief economist, also stepped down, saying his "mission here is complete".

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