(Adds Pimco declined to comment, portfolio manager quotes)
NEW YORK, Sept 3 (Reuters) - Investors pulled cash from the Pimco Total Return Fund for a 16th straight month in August despite some improvement in performance for the world's largest bond fund.
The fund, run by Bill Gross, had net outflows of $3.9 billion in August, which brings the Total Return Fund's net cash withdrawals to almost $70 billion since May 2013, Morningstar said on Wednesday.
It had $221.6 billion in assets at the end of last month, down from a peak of $292.9 billion in April 2013.
The continuation of the fund's record outflow streak came as it posted a positive 1.11 percent return in August, surpassing 77 percent of its peers, according to Morningstar. That said, the fund is up 4.31 percent for the year as of Friday and trails 73 percent of its peers.
Analysts have said cash outflows began last year due to weak returns; the fund declined 1.9 percent in 2013, its worst performance in nearly two decades. Gross's public falling-out with former heir-apparent Mohamed El-Erian, who shared the co-chief investment officer title, exacerbated investors' unease.
Newport Beach, California-based Pimco, a unit of German financial services company Allianz SE, had $1.97 trillion in assets as of June 30.
A Pimco spokesman declined to comment.
"Performance has been mediocre, but I think the outflows more reflect concerns about the leadership going forward," David Schawel, vice president and fixed-income portfolio manager of Square 1 Financial, said in a telephone interview. "It can take time for institutions to reallocate, and we're probably still seeing this in these outflows."
In May, Pimco rehired Paul McCulley, who was previously a portfolio manager and the bond giant's top analyst of the U.S. Federal Reserve's policies, as the firm's new chief economist. That followed Pimco's appointment of six new deputy chief investment officers who report to Gross.
The Pimco Total Return Exchange-Traded Fund, an actively managed ETF designed to mimic the strategy of the flagship mutual fund, had net inflows of $87 million in August, its third month of inflows, according to Morningstar. Total assets in the fund at the end of August were $3.6 billion.
Meanwhile, Pimco's major rival, Jeffrey Gundlach's DoubleLine Funds, has been gaining more favor in recent months.
DoubleLine's flagship DoubleLine Total Return Bond Fund attracted net inflows of $562 million in August, its seventh straight month of inflows.
The DoubleLine Total Return Bond Fund is posting returns of 5.46 percent year-to-date, surpassing the benchmark Barclays U.S. Aggregate Bond Index, which is at 4.81 percent. The DoubleLine fund is surpassing 77 percent of its peer category so far this year, according to Morningstar data.
DoubleLine said on Tuesday its DoubleLine Total Return Bond Fund ended August with net inflows totaling $2.47 billion so far this year, and more than $3.42 billion of net inflows into DoubleLine open-end funds. (Reporting By Jennifer Ablan; Editing by Chizu Nomiyama and Jonathan Oatis)