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U.S. Markets

Investors pull $600 million from Pimco Total Return Fund in February

NEW YORK (Reuters) - The Pimco Total Return Fund, which last year lost its crown as the largest bond fund in the world, bled more money in February, with cash withdrawals of $600 million in the month.

In January, the fund had an outflow of $1.1 billion.

The Pimco Total Return Fund had $88 billion in assets under management at the end of February, Pacific Investment Management Co’s website indicated on Wednesday. Assets had plunged to $98.5 billion in August 2015 from a peak of $293 billion in April 2013, when the mutual fund was the world’s largest and run by Pimco co-founder Bill Gross.

“February proved a challenging month for the Total Return strategy,” Pimco, a unit of German insurer Allianz SE, said in a statement.

For the month, the Pimco Total Return Fund posted negative returns of 0.66 percent after fees, trailing the benchmark return of 0.71 percent. So far year-to-date through February, the Pimco Total Return Fund has posted returns of 0.34 percent after fees, trailing the benchmark’s return of 2.1 percent.

Todd Rosenbluth, director of ETF & Mutual Fund Research at S&P Capital IQ Global Market Intelligence, said the Pimco Total Return Fund “seems to be stuck in the penalty box from the management change nearly 18 months ago. Investors that left following the departure of Bill Gross may be skeptical of returning, given the alternatives with longer records under current management.”

Gross, who became known as “the Bond King” during his years at Pimco, left in 2014 for distant rival Janus Capital Group Inc.

Dan Ivascyn, who replaced Gross as Pimco’s group chief investment officer, continues to attract new investors to the fund.

The Pimco Income Fund had an additional $1.2 billion of inflows in February, bringing the total for all of 2015 and the first two months of this year to $16.8 billion, Pimco said in its statement.

As of Dec. 31, 2015, Pimco had $1.43 trillion assets under management.

Reporting By Jennifer Ablan; Editing by David Gregorio and Dan Grebler

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