Pimco's Total Return no longer world's biggest bond fund

The Pimco Total Return Fund is no longer the world's biggest bond mutual fund, following two years of unrelenting withdrawals.

Pacific Investment Management (Pimco), on 4 May, said investors pulled out another $5.6bn (£3.7bn, €5.04bn) from its flagship Pimco Total Return Fund in April (24th successive month of net outflows) leaving the fund's assets under management at $110.4bn.

The biggest is now the Vanguard Total Bond Market Index Fund which had $117.3bn as of 30 April, according to a Vanguard spokesman.

Pimco, in a statement, said the fund delivered a net after fee return of 1.62% year-to-date through April, "outperforming its benchmark by 38 basis points and generating excess returns of 30 basis points above the Morningstar Intermediate Term Bond Average".

John S Woerth, spokesman at US-based Vanguard Group told Reuters: "We do not view this as an asset gathering horse race.

"It is, however, representative of the popularity of low-cost, broadly diversified index funds."

Pimco, which manages assets worth some $1.59tn has roped in former Federal Reserve chairman Ben Bernanke as a senior adviser, in a bid to boost its star power following the unexpected departure of legendary bond manager Bill Gross.

Pimco has suffered about $130bn of net withdrawals from its open-ended funds since Gross' departure even as performance has improved.

Gross, long referred to as the "Bond King", left Pimco last September for smaller rival Janus Capital Group.

The Pimco Total Return Fund struck a peak of $292.9bn in assets under management in April 2013.