Up until the past two months, PIMCO Total Return ETF (NYSEArca: BOND) manager Bill Gross was treating the Barclays Aggregate Bond Index like his own personal punching bag.
However, the active ETF’s performance edge versus the benchmark has been slipping a bit recently as Treasury yields rise.
Gross also manages the $285 billion PIMCO Total Return Fund, which is lagging most of the largest U.S. bond mutual funds for the year, according to Bloomberg News.
BOND is the ETF version of PIMCO Total Return Fund that was launched in March 2012.
“As interest rates have climbed over the past two months, Gross has recommended buying U.S. Treasuries,” Bloomberg reports, adding that PIMCO Total Return also has a longer duration than rival funds.
The portfolio holdings of BOND and PIMCO Total Return Fund don’t always line up exactly. For example, at the end of May, the mutual fund had 37% in Treasuries, compared with 31% for the ETF, according to PIMCO.