By Mike Cherney And Kirsten Grind
Withdrawals from Pacific Investment Management Co.'s flagship
mutual fund jumped sharply again in December, suggesting the giant
bond manager is still grappling with the abrupt departure of
co-founder Bill Gross.
Investors pulled $19.4 billion from the Pimco Total Return Fund,
up from the $9.5 billion yanked in November. However, the new
outflows were down from $23.5 billion and $27.5 billion lost in
September and October as investors reacted to Mr. Gross's surprise
exit to Janus Capital Group Inc. Total assets in the Total Return
fund are down to $143.4 billion from $162.8 billion in
November.
The December pullback indicates the Newport Beach, Calif., firm
is not yet clear of the investor flight triggered by months of
internal strife and the departure of its best-known manager at the
end of September. Pimco, a unit of German insurer Allianz SE, also
lost its former Chief Executive Mohamed El-Erian last year after
clashes with Mr. Gross, who managed the Total Return Fund for 27
years.
The jump in December withdrawals came as Total Return's
performance slipped. The fund was down 0.48% for the month, worse
than the benchmark Barclays U.S. Aggregate index and the average
return of other funds in its category, according to fund tracker
Morningstar. The return figure includes price changes and interest
payments.
For the full year, the Total Return Fund gained 4.69% compared
with 5.97% for the Barclays U.S. Aggregate index. Pimco Total
Return was ranked 190th in its category, which includes 276 funds
that had data for full-year returns, said Russ Kinnel, director of
manager research at Morningstar.
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