The five largest fixed-income mutual funds used in defined contribution plans had DC assets totaling $67.6 billion as of Sept. 30, based on data collected by Pensions & Investments. PIMCO Total Return Fund Class Institutional topped the list with $21.9 billion.
Each of the largest funds used the Bloomberg U.S. Aggregate Bond index as its benchmark. Although last year was challenging for fixed-income assets, Dodge & Cox Income Fund Class I and PIMCO Income Fund Class Institutional bested their benchmark’s -13.01% return.. Additionally, both funds handily topped the Bloomberg U.S. Aggregate Bond index’s 0.02% annualized five-year return.
The Dodge & Cox Income Fund and PIMCO Income Fund both generated positive alpha, a measure of excess return relative to the benchmark, over five years. Similarly, they had positive information ratios, a risk-based return measure based on the fund’s performance vs. the benchmark when taking volatility into account.