Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Retirement Planning > Retirement Investing

Schwab Drops PIMCO Total Return From Target-Date Retirement Fund

Your article was successfully shared with the contacts you provided.

Charles Schwab Corp. removed Pacific Investment Management Co. from its target-date retirement funds after the departure of PIMCO co-founder Bill Gross.

Schwab pulled the PIMCO Total Return Fund, the world’s largest bond fund, from its target-date funds sold to retail investors, spokeswoman Alison Wertheim said in an e-mailed statement. The company also removed the Newport Beach, California-based PIMCO as a separate account manager in the Schwab Institutional Core-Plus Fixed Income Trust Fund, in which the Schwab Managed Retirement Trust Funds invest.

“On the retail side, a search for a replacement strategy is underway and assets have been reallocated between the Schwab Total Bond Market Fund and Loomis Sayles Investment Grade Bond Fund,” Wertheim said.

The PIMCO Total Return Fund, managed by Gross until his departure to Janus Capital Group Inc. last week, suffered an estimated $23.5 billion of withdrawals in September, its worst month ever for redemptions.

Schwab’s target-date mutual funds held about $2.85 billion in assets as of Aug. 31, according to Janet Yang, an analyst at Chicago-based researcher Morningstar Inc. Schwab didn’t say how much money its target-date funds had invested in PIMCO funds.

Target-date funds are the most common default investment in 401(k) retirement accounts for workers who don’t pick their own mix of assets. The funds automatically shift toward more conservative securities such as bonds from more risky ones like stocks as employees near retirement.

Check out What’s Good for the Gross Is Good for the Gundlach on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.