As Vanguard Group’s Total Bond Market Index fund ended April with an AUM of $177.3bn (€159.9bn), it ended the almost two decade lasting dominance of Pacific Investment Management Co. (Pimco) as manager of the world’s largest bond fund. The Pimco Total Return fund closed the month with $110.4bn (€99.0bn)in AUM.
A year ago, Pimco’s total assets exceeded $250bn (€224.8bn), yet the funds outflows increased over the past year, culminating in the exit of its star-manager and co-founder Bill Gross. Within the space of less than a year, assets of the Pimco Total Return Fund halved, outflows amounted to $5.5bn (€5.04bn) over the past month alone.
In contrast to the Pimco Total Return Fund, which relies on the abilities of star managers, the Vanguard Total Bond Market Index fund is centered on index-based investment strategies, in line with a broader trend towards passive investment products.