Pimco Total Return fund, the biggest mutual fund, has suffered a 1.17 percent loss this year, and its mortgage-backed securities holdings may create more difficulties, says Daryl Jones, director of research at Hedgeye Risk Management.

"Clearly, Pimco's Bill Gross, [manager of the fund], and the big bond boys are experiencing some performance issues," Jones writes in Fortune.

"The broader issue with bond managers like Pimco is how far afield they have journeyed in search of yield. And therein lies the key question: At what cost does this hunt for yield come?"

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

Hedgeye estimates that almost 34 percent of Pimco Total Return's holdings are in agency mortgage-backed securities (MBS).

The spread of MBS yields over the 10-year Treasury has shrunk to a puny 68 basis points, a near-record low, Jones writes.

Just a 50-basis point increase in the spread, easily possible with a Federal Reserve tapering, would spark a 5 percent drop in agency MBS prices, Hedgeye calculates.

"The issue for firms like Pimco is that a 5 percent correction in one of its more significant asset class exposures is likely to lead to continued underperformance and accelerated outflows," Jones writes.

But Gross and Total Return have plenty of defenders.

"The fund's occasional stumbles may be particularly disappointing to investors who have come to expect perfection from this fund, but they're otherwise bumps in a long road of great success," Morningstar analyst Eric Jacobson writes in a report on Morningstar.com.

"Gross has continued to show, in both bull markets (2012) and bear (2008), that the fund can still excel."

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

Related Stories:

• Pimco's Gross: Longer-Term Treasury Investors Should Be Worried
• Experts: Bond Market Rally Coming to an End