Investors Fled a Popular Fund. Over a Decade Later, Was That a Good Call?

On Sept. 26, 2014, I was working out at my gym, getting in a nice workout to start my day. Around 7:40 a.m., I glanced at a TV tuned to CNBC and saw words that didn’t make sense: Bill Gross to Janus. I paused for a second and then thought: Whatever that means, I’d better get to the office right away.

I grabbed my phone and confirmed that Gross was leaving Pimco for Janus. Pimco wanted to gradually ease Gross into retirement. He wanted nothing to do with that and started running money for Janus the following Monday. At the time, Pimco Total Return PTTRX was the second-largest mutual fund. But not for long, as one of the great fund exoduses was unleashed. In one year, the fund went to $98 billion in assets from $221 billion.

Now that many years have passed, it’s informative to look at whether selling was a good idea and to compare Pimco Total Return with the top funds that received investors’ money when they fled Pimco.

Pimco Total Return After Bill Gross

Gross gets an F for succession planning but an A for building a great investment organization. Although Gross was the face of the fund, it was supported by an army of traders, analysts, managers, quantitative researchers, and derivatives specialists. Their work fed into the fund and enabled it to produce strong results even as it grew larger and larger.

Thus, Pimco had all the resources needed to keep running the fund even though many investors clearly thought otherwise. At the time, we cut our Morningstar Medalist Rating to Bronze from Gold as we saw big concerns but also big strengths behind the fund. Some key questions were: How would the new trio running the fund work together? Would they change the strategy? Would outflows harm performance?

Had there been a normal transition, then only the first question would have remained. It turned out that outflows had no measurable impact on returns. We compared the fund’s returns with those of near-clones at Pimco that didn’t suffer flow challenges and saw that returns were in line. Because of its size, Pimco Total Return had liquid holdings like Treasuries, mortgages, derivatives, and high-quality corporate bonds.

New management proved to be a little more cautious than Gross, and Pimco has since reshuffled leadership at the fund in a way that has brought a little more aggression back. From 2014 to present, the fund’s performance was often close to the returns of peers and the Bloomberg US Universal Index benchmark, which we use for core-plus bond strategies. From October 2014 through May 2026, Pimco Total Return gained a cumulative 31.6% compared with 24.9% for the Bloomberg US Aggregate Bond Index.

In short, investors were fleeing a nondisaster. It’s a reminder that fund net asset values are based on the underlying holdings, and the manager has no impact on that. To be sure, if a great manager were replaced by someone with few resources and a bad track record or no track record, it would be wise to look elsewhere. But it would take some very extreme circumstances to lead us to say run for the exits.

What Were the Top Replacements?

Here were the top choices of those fleeting Pimco Total Return in the six months after Gross’ departure: TCW MetWest Total Return Bond MWTRX, with $30 billion in net inflows, and Vanguard Total Bond Market Index VBTLX, with $19.6 billion. Also receiving big flows were Dodge & Cox Income DODIX at $13 billion, DoubleLine Total Return Bond DBLTX at $10 billion, PGIM Total Return Bond PDBAX at $5.4 billion, and Pimco Income PONAX at $5.2 billion. Let’s look at why each fund would have appealed to those leaving Pimco Total Return.

At the time, TCW MetWest Total Return Bond boasted seasoned managers in Steve Kane, Laird Landmann, and Tad Rivelle. So, no key-person risk there. In addition, it was a bold active strategy that moved among high-yield bonds, nonagency mortgages, and investment-grade debt. In addition, the trio had all worked at Pimco, so there was a logical path to this fund.

Vanguard Total Bond Market Index naturally appealed to those who were finished with drama and wanted a low-cost fund that didn’t make macro bets—or bets of any kind.

Dodge & Cox Income’s team approach and emphasis on security selection offered something that Pimco Total Return did not. This firm had tremendous stability, and because the fund wasn’t as big as Pimco Total Return, security selection could still add value.

DoubleLine Total Return Bond appealed to those who wanted a star manager with an outstanding record. Jeffrey Gundlach made his name with nonagency mortgages, first at TCW and then at his own firm. After Gross left Pimco, the financial press debated whether Gundlach was the new Bond King.

PGIM Total Return Bond was a mix of Dodge & Cox’s emphasis on corporate bonds and TCW MetWest’s style of bold macro investments. And as an arm of an insurance company, you would expect a steady team-based approach here.

Pimco Income was a logical choice, too, as you still get those Pimco resources and a known quantity in manager Dan Ivascyn. However, Pimco Income was (and still is) a fund that takes on more risk and is more income-oriented, so the move made sense only for those willing to go up a notch in risk.

How Did They Fare?

Pimco Total Return topped its benchmark and three of its top replacement choices from October 2014 through May 2026. Three replacements topped Pimco Total Return, though one was ahead only by a hair. In short, staying put was a fine choice. Side note: Pimco Total Return was and remains in Morningstar’s 401(k) and is my largest bond fund holding.

Topping the group was Pimco Income, which gained a cumulative 61.6%—far and away the top returner. All credit to Ivascyn, who outperformed this group and most multisector bond funds along the way, even as the fund became massive. Ivascyn has made the most of nonagency mortgages, emerging-market debt, high yield, and macro bets. This fund’s success isn’t a knock on the other funds discussed here, though, as it takes on more risk than the rest and ought to have greater returns.

The milder-mannered Dodge & Cox Income came second with 39.6% returns. This illustrates the benefits of bottom-up investing, but the fund’s lesser returns show just how hard it is to consistently succeed with macro bets. Though very different from Pimco Income, both funds highlight the benefits of finding managers who are great at what they do and have an advantage over the competition.

PGIM Total Return Bond enjoyed a 31.9% return, just 3 basis points annualized better than Pimco Total Return. The fund’s judicious risk-taking has enabled it to limit the downside. One change that happened well after Gross’ departure was that PGIM management stopped leaning toward longer duration as interest rate risk seemed too dicey to the team.

Lagging Pimco Total Return was DoubleLine Total Return Bond, which returned 26.6%. The new Bond King couldn’t keep up with the former Bond King’s former fund, though Gundlach still topped the Aggregate Index’s return. The strategy lagged most peers over the bulk of 2016 and in 2019 as corporates and longer-term bonds surged. However, when rates spiked in 2021 and 2022, the strategy’s structurally shorter duration tilt helped it stay ahead of most of the pack.

Vanguard Total Bond Market Index returned 24.5%. Fixed income is one area where active funds generally beat passive funds, albeit with more risk.

Finally, we come to TCW MetWest Total Return Bond, which returned about 22% cumulatively. Yes, the top choice of former Pimco Total Return investors turned out to be the weakest pick, though it certainly wasn’t a disaster. The fund’s focus on managing credit risk has reduced losses in credit-driven selloffs, but its long duration has burned it when interest rates spike. The three who led the fund in 2014 have all retired in the past few years.

Pimco Total Return vs. Its Top Replacements

Most of the chosen alternatives achieved good results, but staying with Pimco Total Return would have worked just fine. While Pimco Income was clearly the top performer and TCW MetWest Total Return Bond the weakest, the rest were tightly bunched.

Where Is Pimco Total Return Today?

Pimco Total Return is currently in a good place, but it took some missteps along the way. Although the fund handled redemptions quite well, it may have gotten a little too tentative and is now striking a better balance between risk and caution.

The three managers who took over after Gross have now all left. When Mark Kiesel retired in November 2025, Mihir Worah and Scott Mather had already departed.

Mohit Mittal took the lead role in October 2022 when Mather retired. Ivascyn, Pimco’s group CIO, and Qi Wang, CIO of portfolio implementation, were added to the fund concurrent with Mather’s leave, while Mike Cudzil joined the team when Kiesel stepped down.

When Mittal took over, the firm tasked him with improving performance after what had been a stretch of mediocre returns. He aimed to do so by incorporating high-conviction ideas from across the firm to a greater degree than his predecessor, such as swap spread trades and a currency carry basket. Performance picked up, and three-year returns are in the top 20% of the intermediate core-plus bond Morningstar Category.

Takeaways From the Great Exodus

Sometimes manager departures really do hurt a fund’s prospects, but they are rarely crippling. Firms with great depth, such as Pimco, Dodge & Cox, and American Funds, are naturally more resilient and can handle manager departures better than most.

Take your time and walk through the case for a fund after a key change. There’s no rush.

This article first appeared in the June 2026 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor by visiting this website.