With investors anticipating the end of the Federal Reserve’s stimulus program, the biggest mutual fund in the world, Pimco’s Total Return Fund, took a $41bn hit over the past four months after losses and withdrawals, according to Morningstar.
Bloomberg BusinessWeek reports that the $292bn fund has shrunk to $251bn, a reduction of 14%, since May, the month that Federal Reserve Chairman Ben Bernanke told Congress that the central bank’s $85bn in monthly asset purchases could begin to wind down toward the end of the year.
The Federal Open Market Committee’s next meeting is set for 17th and 18th September.
Launched in 1987 by 'Bond King Bill Gross, Pimco’s Total Return Fund has been a reliable standout — beating an average of 75% of its peers in each year of the past decade. So far this year, however, 87% of similar funds have better returns.
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