Thanks To The Financial Crisis, Bill Gross Will Be The Biggest Manager Ever

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Bill Gross’s Pimco Total Return Fund is set to become the largest fund in the world.

This December, it will probably surpass the previous fund record of $202.3 billion of assets under management, set by Growth Fund of America in 2007.

Bloomberg: Total Return took in $42 billion of new cash this year through October, four times more than any other U.S. mutual fund, Morningstar data show. The growth underscores the reluctance of individuals to invest in equities even after U.S. stocks surged 61 per cent from a 12 1/2-year low in March, and the appeal of Gross’s returns, which beat all but four similar funds in the past decade.

Come on, deep down he has to be at least slightly happy about the turn of events over the last two years. Regardless, the gargantuan size of his fund, and its rapid growth, say much about investor sentiment. Bonds are king.

Investors added a net $297 billion to bond funds in the first 10 months of 2009, compared with $12 billion for stock funds, according to Morningstar.

If just 10% of this bond allocation were switched into stocks it would amount to nearly $30 billion of inflows — 2.5x the inflows for the first 10 months of 2009.

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