Who said bonds are boring? (Or that index funds are too, for that matter). Certainly not Bill Gross or Gus Sauter. The two exchanged bragging rights as the "World's Largest Fund Manager" yesterday after Bisys' Financial Research Corp. (FRC) updated its leader board.

FRC estimated that Pimco Total Return grew to $64.4 billion in assets at the end of September. Assets in the Vanguard Index Trust 500 slipped to $62.8 billion at the end of the month. While Vanguard's fund dogged Fidelity Magellan for years before claiming the title, Pimco Total Return has made a quick move. Of course, it has been helped by the 30 percent fall in the S&P 500 index this year.

Even Gross seems humble.

"It's no knock on Vanguard 500 that stocks have been going down while bonds have held up," he told the local paper the Los Angeles Times. "But as for our fund being No. 1 and not others, our team has done a great job of returning value to investors over the years."  

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