By Kirsten Grind and Min Zeng
Investors pulled $3.1 billion from Pacific Investment Management
Co.'s flagship Total Return Fund in April, marking the 12th
consecutive month of outflows.
Assets in the fund, managed by Pimco chief investment officer
Bill Gross, sank to $230 billion at the end of April, compared with
$232 billion at the end of March, according to data released
Thursday from fund research firm Morningstar Inc. Asset numbers
also take into account performance of the fund, while flow numbers
don't.
The fund has suffered $55.3 billion net redemptions since last
May, when the streak of outflows started. That is more than the
size of most mutual funds: Only 24 funds in the U.S. have more than
$55 billion in net assets, according to Morningstar.
A Pimco spokeswoman did not immediately respond to a request for
comment.
Pimco, based in Newport Beach, Calif., has been struggling in
part because of a management shake-up earlier this year that saw
the departure of its high-profile chief executive, Mohamed
El-Erian. In Mr. El-Erian's place, Pimco appointed six new deputy
chief investment officers.
Mr. Gross also has been suffering from poor performance.
According to a preliminary estimate from Morningstar, the fund
returned 0.739% in April, while its benchmark, the Barclays U.S.
Aggregate Bond Index, returned 0.844%. So far this year, Mr.
Gross's fund is up about 2%, compared with 2.7% for the
benchmark.
Mr. Gross has failed to stem the bleeding even as U.S. bond
funds overall have seen new cash flowing in.
U.S. bond mutual funds and exchange-traded funds attracted $11.2
billion new cash in April and $43.4 billion since the start of the
year, according to fund tracker TrimTabs Investment Research.
One of Pimco's main competitors, the DoubleLine Total Return
Bond Fund, saw net inflows of $319.5 million in April, according to
the company.
The $3.1 billion is the same amount investors pulled from Pimco
Total Return in March and is nearly double the $1.6 billion
investors pulled in February, according to Morningstar.
Some analysts said the persistent outflows suggest investors
continue to worry about Pimco's performance following the recent
management changes.
"It's more of a vote again Bill Gross's performance and concern
that he's losing his Jedi powers," said Jeff Tjornehoj, head of
Lipper Americas Research.
Mr. Gross's fund has benefited from price gains in the broad
U.S. fixed-income markets this year, but its concentration on
shorter-dated bonds has hurt the performance because longer-dated
bonds have led the rally in 2014.
Some clients have stopped investing new cash into Pimco this
year.
Steven Rogé, a portfolio manager at Bohemia, N.Y.-based R. W.
Rogé & Company Inc, said he has not considered pulling cash out
of Pimco at the moment but he has invested new cash into some bond
fund at Janus Capital Group Inc.
Mr. Rogé's firm has over $230 million in assets, including about
$6 million in Pimco Total Return Fund.
Pimco's funds have been suffering from outflows across the firm.
The funds saw outflows of $7.3 billion in March.
Write to Kirsten Grind at kirsten.grind@wsj.com and Min Zeng at
min.zeng@wsj.com
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