ETF Trends
ETF Trends

PIMCO Total Return ETF (NYSEArca: BOND) is off to a flying start since the March launch in both gathering assets and performance.

The exchange traded fund managed by Bill Gross has already pulled in over $1 billion in assets and is handily outperforming its mutual-fund counterpart.

For the three months ended June 5, BOND posted a gain of 5.1%, compared with 2% for the Class A shares of PIMCO Total Return Fund, according to Morningstar.

BOND has net assets of $1.26 billion, the best start for an actively managed ETF ever, writes Marc Prosser at Forbes.

He cites two reasons why the ETF version is outperforming PIMCO Total Return Fund.

“Because the BOND ETF is new, the fund’s manager and PIMCO founder Bill Gross did not have to deal with any legacy positions that may have hindered performance in the 25-year-old Total Return,” Prosser wrote.

“The PIMCO Total Return Fund has over $250 billion under management. This makes it very difficult to move in and out of positions, and significantly limits the universe of investable opportunities. With less than 0.5% of the assets in the mutual fund, the relatively small size of the BOND ETF opens up a lot more opportunities to the ETF, that are too small for the larger mutual fund,” he added.

BOND’s solid start has some investors and financial advisors wondering if they should switch over to the ETF shares from the mutual fund. [PIMCO Total Return: ETF or Mutual-Fund Wrapper?]

PIMCO Total Return ETF

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.