PIMCO ETF Falls In Line with Total Return Fund

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Investors have been piling into the PIMCO Total Return ETF (NYSEArca: BOND) as the ETF shares outperformed the mutual fund version over the initial months. However, the performance disparity has diminished, and investors should not bet on the ETF to always beat its mutual fund counterpart, according to reports.

The BOND ETF has gained 7.6% since it launched on March 1, almost twice that of the A-shares PIMCO Total Return Fund (PTTAX) with a 3% return through Aug. 27, reports Jason Kephart for InvestmentNews. [PIMCO Total Return: ETF or Mutual-Fund Wrapper?]

Nevertheless, the outperformance was largely experienced  in the first three months – between March 1 to May 29, the ETF beat the mutual fund by 4.0%. Since May 29, BOND has gained 2.8%, compared to the 2.1% rise in PTTAX.

Morningstar analyst Timothy Strauts believes the difference in performance is due to their size – the smaller ETF version may trade more nimbly than the $270 billion mutual fund as the ETF only holds 300 securities, compared to the mutual fund’s 18,000 securities, reports Stan Luxenberg for Wealth Management. [Why PIMCO Total Return ETF is Beating Its Mutual Fund Counterpart] ... Continue to read.