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PIMCO Total Return ETF Outsells Mutual Fund in March


PIMCO Total Return ETF (BOND) attracted more new cash in March than the mutual fund that is also run by bond maven Bill Gross, illustrating the popularity of the exchange traded fund wrapper.

PIMCO Total Return Fund (PTTRX) gathered $32 million in investor deposits last month, the lowest inflow since December 2011, Bloomberg reports.

Meanwhile, PIMCO Total Return ETF took in $284.7 million in March, according to IndexUniverse flow data.

BOND is the ETF version of PIMCO Total Return Fund that has been trading for a little more than a year. BOND has already grown to $4.6 billion in assets under management and is the biggest actively managed ETF. PIMCO Total Return Fund is the largest mutual fund with assets of roughly $289 billion.

The smaller size of BOND has allowed Gross to be more nimble, especially during the ETF’s early months. BOND has a trailing one-year total return of 11.1% to outperform the institutional share class of PIMCO Total Return Fund, which has gained 7.8%, according to Morningstar. The Barclays US Aggregate Bond Index is up 3.7% for the period.

Yet as the ETF continues to grow in size, analysts are warning investors to temper their performance expectations after BOND blew away its benchmark and mutual-fund counterpart during its first year. [Cash Influx May Cool PIMCO Total Return ETF’s Outperformance]

PIMCO Total Return Fund gathered $2.2 billion in the first quarter of 2013. Last year, investors added $18 billion to the fund, according to Bloomberg.

BOND carries an expense ratio of 0.55%. Institutional shares of PIMCO Total Return Fund have operating expenses of 0.46% while the A shares charge 0.85%.

“The ETF offers the unique opportunity to get the management expertise of one of the best active managers in a vehicle with far lower expenses than the retail share class of its sister mutual fund,” says Morningstar analyst Timothy Strauts in a review of BOND.

PIMCO Total Return ETF


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