Tags: Gross | outflow | Total | Return

Bill Gross: We're 'Concerned' About Outflow From Pimco Total Return

By    |   Tuesday, 17 June 2014 04:02 PM

Pimco Total Return, the world's biggest bond fund, has suffered outflows for 13 straight months, and that has caught the firm's attention, says chief investment officer Bill Gross.

"It certainly does concern us: you like to grow," he told Yahoo.

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The fund has seen $59.6 billion of net withdrawals during that period, putting its asset total at $229 billion as of May 31.

Gross notes that the outflow began the same month that former Federal Reserve Chairman Ben Bernanke began warning that a tapering of the Fed's bond purchases was coming.

"In the beginning it wasn’t just Pimco, it was Pimco, BlackRock and everybody else managing bonds" who suffered withdrawals, Gross said.

"People were all of a sudden discovering bonds could go down in price. I think that explains the first five or six months."

Since January, the fund has suffered from the tumult surrounding ex-CEO Mohamed El-Erian's resignation from Pimco, Gross said. News stories reported that El-Erian and other Pimco employees objected to Gross' hard-charging style.

"Legitimately investors may have concerns," Gross said. But, "Pimco is still beating the market."

Pimco Total Return ranks in the top 13 percent of intermediate-term bond funds for its return over the last 10 years, but in the bottom 82 percent over the last year, according to Morningstar.

"Pimco Total Return remains a compelling choice," writes Morningstar analyst Eric Jacobson on his firm's web site. "[The] changes have not risen to a level that changes Morningstar's overall opinion of this fund."

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Pimco Total Return, the world's biggest bond fund, has suffered outflows for 13 straight months, and that has caught the firm's attention, says chief investment officer Bill Gross.
Gross, outflow, Total, Return
269
2014-02-17
Tuesday, 17 June 2014 04:02 PM
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