PIMCO Total Return ETF Trounces Benchmark in First Year

PIMCO Total Return ETF (NYSE: BOND) is celebrating its first birthday with one-year returns that have crushed its benchmark and the mutual-fund version which is also managed by Bill Gross.

Since its launch, BOND has posted a total return of 12.5% versus 3% for the Barclays Aggregate Bond Index.

BOND’s outperformance has left many investors scratching their head since the ETF and the mutual fund follow the same strategy, and both are overseen by bond guru Gross.

“When BOND was launched with about $100 million in assets, Bill Gross was able to start fresh with a brand-new portfolio. The recent outperformance shows how a highly skilled active manager can add tremendous value in a little portfolio. It pays to be small,” says Morningstar analyst Timothy Strauts.

BOND has quickly grown to the largest actively managed ETF with over $4 billion in assets.

“Because the ETF’s portfolio is relatively lean and nimble, PIMCO’s best individual bond ideas can make up relatively larger portions of BOND,” Strauts notes. “Effectively, the ETF is performing like Bill Gross’ ‘best ideas’ list.”

Source:  John Spence, ETF Trends

BOND is a component of the D2 Capital Management Multi-Asset Income Portfolio.

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