Since replacing Bill Gross as chief investment officer at Pimco four years ago, Daniel Ivascyn has made his mark on the fund giant. As manager (along with Alfred Murata) of Pimco’s Income Fund, he has seen the fund’s assets quadruple in size to $112 billion, while Gross’s old Total Return Fund has shrunk by three quarters from its peak size.

Under Ivascyn, the fund has healthily beaten its benchmark, the Bloomberg Barclays Aggregate, and the majority of other bond funds. This performance helped Pimco attract $144 billion of asset inflows last year along with industry awards for Ivascyn.

Analysis of Pimco disclosures by Risky Finance shows that the Income Fund, and the other funds that Ivascyn manages are heavy users of credit default swaps. Together with traditional forms of leverage, this helps explain Ivascyn’s outperformance – and highlights how his funds may be riskier than many investors realise.