Schwab drops Pimco Total Return from target date portfolios
Charles Schwab Corp (SCHW.N) has dropped the Pimco Total Return Fund from its 10 target date funds and collective trusts, a company spokeswoman told Reuters on Thursday.
Schwab is looking for a replacement for the Pimco fund and has temporarily reallocated the Pimco assets into the Schwab Total Bond Market Fund (SWLBX.O) and the Loomis Sayles Investment Grade Bond Fund (LIGRX.O), the spokeswoman said.
Schwab will reallocate the Pimco assets among its different strategies in the portfolios until it finds a permanent replacement for Pimco, the spokeswoman said. It could not immediately be determined how much in assets is in the collective trust, but it totals billions of dollars.
Schwab’s decision to replace Pimco shows how significant the headline risk is for 401(k) plan managers to keep Pimco in their funds, said Janet Yang, a fund analyst at Morningstar.
“It’s not surprising given how much has flowed out of the fund at this point,” Yang said.
Source: Reuters- Schwab drops Pimco Total Return from target date portfolios
