The largest Mutual Fund in the world, Pimco’s Total Return Fund, suffered a decline of $41 billion over the last four months due to losses and redemptions as investors headed for the exit in anticipation that the Federal Reserve will soon begin to unwind its monetary stimulus program.

The yield on 10-year US treasuries has increased from 1.76% at the beginning of the year to 2.97%. Bond prices fall when yields rise.

Historically Pimco’s TRF has been a top performer outpacing an average of 75% of comparable funds each year over the past 10 years. Yet, this year the situation is not so good as the Pimco TRF trails 87% of peers. Bill Gross, who launched the fund in 1987, favours front-end yield and inflation-protected securities.

Related article: http://www.businessweek.com/articles/2013-09-05/the-worlds-biggest-mutual-fund-takes-a-41-billion-hit#r=read