By Jennifer Ablan
March 2 The Pimco Total Return Fund,
the world's largest bond fund, trailed more than 70 percent of
its peers in February despite returning to gains after a rough
2013, preliminary Morningstar data showed on Sunday.
The fund, run by Bill Gross, rose 0.517 percent in February,
recovering from an annual loss of 1.92 percent in 2013, its
worst annual performance since 1994. Put in perspective, the
Barclays U.S. Aggregate Bond Index posted returns of 0.53
percent in February.
The Pimco Total Return Fund's latest monthly performance
beat just 29 percent of its peers, according to Morningstar. It
has $237 billion in assets.
So far this year, the fund is posting returns of 1.877
percent, which is lagging 76 percent of its peers, according to
preliminary data by Morningstar.
"Focusing on two months of weak relative returns for any
fund, especially when the margin of difference between a fund
and its category average is a barely perceptible 16 basis
points, is making a mountain out of a molehill," Morningstar
research analyst Eric Jacobson said on Sunday.
"Pimco believes that fixed income should be a key part of
any diversified portfolio, whether it be institutional or
retail, and we still see plenty of opportunities in the global
market for bonds for the patient investor," a spokesman for
Pimco oversees $1.91 trillion in assets. The firm's
succession plan has been in the spotlight since January's
stunning announcement that Mohamed El-Erian, its chief executive
officer and co-chief investment officer, was resigning.
Gross, who had long anointed El-Erian as his heir apparent,
has sought to reassure Pimco's clients about the new leadership
structure put into place since the El-Erian announcement.
Gross called the collection of six new deputy chief
investment officers a "significant improvement" from Pimco's
previous structure, which concentrated nearly all investment
strategy decisions onto the shoulders of Gross and El-Erian.
El-Erian, who shared the chief investment officer title with
Gross, will leave the Newport Beach, California-based firm later
The investment firm named Dan Ivascyn, Andrew Balls, Mark
Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah as
deputy chief investment officers.