Pimco's investment chief Daniel Ivascyn is in a slump, hurt by a bet on housing bonds and investors’ flight to safety.

For much of the past decade, Ivascyn’s Pimco Income Fund has posted stellar returns. Its surging popularity made it the world’s largest actively managed bond fund and helped salve the wounds at Pimco left by the acrimonious 2014 departure of Ivascyn’s predecessor, Bill Gross.