PIMCO and DoubleLine flagship funds gain demand in October

NEW YORK Mon Nov 5, 2012 1:33pm EST

NEW YORK Nov 5 (Reuters) - The PIMCO Total Return Fund, the world's largest mutual fund, attracted over $2.4 billion in new money in October, increasing the fund's assets to $281 billion and drawing more demand than competitor firm DoubleLine Capital LP.

PIMCO's flagship fund, run by founder and co-chief investment officer Bill Gross, is up 9.49 percent this year, beating 87 percent of peers in Morningstar's intermediate-term bond fund category.

In recent letters to investors, Gross has criticized the towering debt levels of developed economies and the effectiveness of the U.S. Federal Reserve's attempts to stimulate growth through its bond-buying plans.

Pacific Investment Management Co., based in Newport Beach, California, had $1.92 trillion in assets as of Sept. 30.

DoubleLine Capital LP, another prominent bond firm with more than $45 billion in assets, attracted roughly $1.9 billion in new money into its flagship DoubleLine Total Return Bond Fund in October, according to Morningstar.

The fund, run by Jeffrey Gundlach, DoubleLine's chief executive officer and chief investment officer, has $35.36 billion in assets, and is up 8.52 percent so far this year - beating 79 percent of peers, according to Morningstar.

Demand for bond mutual funds has trounced that of stock mutual funds this year despite the benchmark S&P 500 's rise of about 12.34 percent. From the start of the year through September, U.S.-based bond mutual funds have gained $238.27 billion in new money, while stock mutual funds have redeemed $82.97 billion, according to the Investment Company Institute.

The top-performing bond fund so far this year is Chou America Management Inc.'s Chou Income Fund, which has produced a 31.11 percent return for the year to date, and has just $6.36 million in assets, according to Morningstar.

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