April 21 The Pimco Global Multi-Asset (PGAIX), Pimco Foreign Bond (PFUIX) and Pimco Investment Grade Corporate Bond (PIGIX) funds are suffering the heaviest net outflows over the trailing one-year period through March 31 among U.S.-domiciled Pimco funds rated by Morningstar Inc., data showed on Monday.
While Bill Gross's Pimco Total Return Fund (PTTRX) has grabbed most of the headlines over the past year, Morningstar said Pimco's Global Multi-Asset, Foreign Bond and Investment Grade Corporate Bond funds have experienced the heaviest outflows over the trailing year through March 31 as a percentage of their start period assets.
Gross, co-founder of Newport Beach, California-based Pimco and dubbed the market's "Bond King," is still dealing with the waves caused by a public falling-out with former heir-apparent Mohamed El-Erian, against the backdrop of weak performance and outflows in several of its marquee funds.
The Pimco Global Multi-Asset fund, which Morningstar said "struggled" under El-Erian and then under managing director Saumil Parikh, had more than $2.86 billion in net outflows over the 12 months ending March 31, or 59 percent of its beginning period assets. The Global Multi-Asset fund now oversees $1.62 billion.
The Pimco Foreign Bond fund, which currently holds $2.46 billion in assets, had $2.58 billion in net outflows over the trailing year through March 31, or 50 percent of its start period assets. The Pimco Investment Grade Corporate Bond fund, which currently holds $5.34 billion in assets, bled $5.26 billion over the trailing year through March, or 48 percent of beginning period assets under management.
For its part, the Pimco Total Return, the world's largest bond fund at $232 billion, has seen $51.62 billion of net outflows in the 12 months ending March 31, or 18 percent of beginning period assets under management.
The data "suggests that outflows from Pimco Total Return, while huge in dollar terms, haven't been as staggering in percentage terms," Morningstar analysts Michael Herbst and Eric Jacobson wrote. "In the near term, sharp outflows can crimp a manager's style or force him to sell securities prematurely to meet redemptions. Those risks are greater for concentrated portfolios, especially in less-liquid sectors of the market such as high-yield debt."
Herbst and Jacobson said those risks are less worrisome in very liquid parts of the market such as developed-market government bonds as well as those receiving cash flows from coupon payments and/or security amortizations.
Morningstar said the Pimco Total Return is "quite diversified" with roughly 30 percent of assets in U.S. Treasuries, 15 percent in agency mortgages, 10 percent in non-U.S. developed markets, and an additional slice of assets in cash as of March 31. (Reporting by Jennifer Ablan; Editing by Cynthia Osterman)