Vanguard becomes the world's largest bond fund

Vanguard Group became the world's biggest bond fund on Monday, after overtaking Pacific Investment Management Co. (Pimco), a unit of Germany's insurer Allianz, that has been the world's largest bond fund for almost two decades.

Vanguard's Total Bond Market Index Fund had $117.3bn in total assets under management (AuM) at the end of April, while AuM at Pimco's Total Return Fund decreased to $110.4bn, according to estimates of both companies.

Pimco's strength started weakening last September, when its co-founder Bill Gross exited the company after clashes with some of the company's other top executives.

As of Tuesday, 5 May investors had pulled about $110bn since Gross' departure.

Gross moved to Janus Capital Group Inc. to manage its global unconstrained bond fund.

Read more: Bill Gross' Janus fund suffers first outflow

Vanguard says that it became one of the biggest recipients of that cash.

The company has benefited from a diverse base of long-term shareholders

The company “has definitely benefited from a diverse base of long-term shareholders,” said Katie Henderson, a spokeswoman for the Vanguard Group.

“We have advisers, institutions, and individuals who use this really as a core long-term holding,” she added.