(Adds flows for Pimco Total Return ETF, details on flows)
By Sam Forgione
NEW YORK, Sept 4 Bill Gross's Pimco Total Return
Fund, the world's largest bond fund, lost $41 billion of its
assets in the past four months through withdrawals and price
losses, according to data from Morningstar Inc on Wednesday.
The Pimco Total Return Fund, which had $7.7 billion in net
cash outflows in August alone, has seen its assets shrink by 14
percent to $251 billion at the end of August from $292 billion
at the end of April, Morningstar added.
Investors have pulled cash out of bond funds this year as
rising interest rates have made fixed-income securities
vulnerable to price losses. Gross and his co-chief investment
officer at Pimco, Mohamed El-Erian, are watched closely because
they have made money by anticipating big moves in the economy
and interest rates way before other investors.
Investors have pulled about $26 billion from the fund since
the start of May, Morningstar data shows. In addition, the fund
sustained losses of roughly $15 billion over that period as the
fund has declined 5.5 percent since the end of April,
preliminary data from Morningstar shows.
Gross's performance has likely suffered as a result of bets
on Treasury Inflation-protected Securities or TIPS, emerging
market debt and corporate credit, said Morningstar fund analyst
The latest monthly withdrawals accelerated after outflows of
$7.5 billion in July. The fund fell 1.07 percent in August,
according to preliminary data from Morningstar, better than just
9 percent of other U.S. open-ended intermediate-term bond funds.
The preliminary data showing a drop in the fund's
performance in August also marked a downturn from July, when the
fund rose 0.49 percent. So far this year, the fund is down 3.86
percent, according to Pimco's website.
Investors withdrew cash from bond funds in August on
expectations of a pullback in the Federal Reserve's $85 billion
in monthly purchases of Treasuries and mortgage-backed
Investors pulled $39.5 billion from bond mutual funds and
exchange-traded funds in August through Aug. 28, data from
research provider TrimTabs showed.
Interest rates also rose on the worries surrounding the Fed.
The yield on the benchmark 10-year U.S. Treasury note hit a
two-year high of just over 2.93 percent on Aug. 22. Treasury
yields move inversely to prices.
The Pimco Total Return Fund had 39 percent of its holdings
in U.S. government-related securities at the end of July, data
from the firm's website has shown.
The Newport Beach, California-based Pacific Investment
Management Co, a unit of European financial services company
Allianz SE, had $1.97 trillion in assets as of June
30, according to the firm's website.
Investors also pulled $94.6 million from the Pimco Total
Return Exchange-Traded Fund, an actively-managed ETF
designed the mimic the strategy of the flagship bond fund.
While those outflows were down modestly from outflows of
$137 million in July, they still marked the fourth straight
month of outflows from the ETF, according to Morningstar.
The DoubleLine Total Return Bond Fund, meanwhile,
had $1.13 billion in estimated outflows in August, marking its
third straight month of withdrawals from the fund.
The outflows from the fund, run by Jeffrey Gundlach,
accelerated after withdrawals of $580 million in July. The
latest outflows also lowered the fund's assets to roughly $36.8
billion, Morningstar said.
Gundlach's fund fell just 0.31 percent in August, better
than 94 percent of peers, preliminary data from Morningstar
shows. So far this year through August, the fund is down 0.88
percent, also above 94 percent of peers according to preliminary
The Los Angeles-based DoubleLine Capital, where Gundlach
serves as chief executive and chief investment officer, oversees
roughly $57 billion in assets.
(Editing by Jennifer Ablan, Chris Reese and Tim Dobbyn)