A total return fund is one that seeks to maximise gains from both income generatiing investments, such as bonds and dividend paying stocks, while simultaneously aiming to invest in assets which will experience capital appreciation. Investors’s income gains in these funds are usually reinvested in the fund. Their final returns are the total generated by both the income and the capital appreciation of the assets the fund invests in.
total return fund in the news
In April 2014 Pimco’s legendary Total Return Fund managed by Bill Gross was beaten by 94 per cent of its rivals. Pimco said in its defence that the fund had outperformed its benchmark index for the past six months and the past two, five and 10 years making it the fifth-best ranked mutual fund in its category. But outflows by the end of March 2014 from the world’s largest fixed income fund reached $52.1bn since April 2013.