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Fund Times

Fund Times: Openings, Closings, & Manager Changes

Pimco, Vanguard, ICI, Putnam, State Street, MFS, TIAA-CREF, and others.

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The Curse of the Largest Fund
Look out, performance-chasers. A bond offering is now the biggest mutual fund in the industry. Thanks to a renewed appreciation for diversification among investors battered by the worst bear market for stocks in a generation, actively managed bond fund Pimco Total Return  (PTTRX) has caught and passed stock index fund Vanguard 500 (VFINX) to become the biggest mutual fund in terms of assets. At the end of September, Total Return had nearly $65 billion in all its share classes while Vanguard 500 had almost $63 billion.

Before celebrating the triumph of fixed income over equities, though, consider Vanguard 500’s reign as the biggest fund. The giant index offering overtook Fidelity Magellan (FMAGX) as the world’s largest fund in April 2000 just as the stock market was falling off its pinnacle, and Vanguard 500 has lost nearly 40% of its value since then.

Dan Culloton has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.