Pimco Returns Fund investors hits record $23.5 billion
Pacific Investment Management Co suffered a record $23.5 billion of withdrawals from its flagship Pimco Total Return Fund in September, with its largest daily outflow occurring on the day of Bill Gross’s surprise resignation from the firm.
The Pimco Total Return Fund has now experienced 17 straight months of outflows, totaling $92.3 billion. Assets under management have fallen below $200 billion, down from a peak of $292.9 billion in April 2013.
“I’d say that this spike in outflows might not be over. Earlier we thought that $8 billion or $9 billion in a month was pretty bad, and here we’re getting $8 (billion) and $9 billion a day,” said Jeff Tjornehoj, head of Americas research at Lipper.
Gross, the bond market’s most renowned investor and sometimes called the “Bond King,” quit Pimco for distant rival Janus Capital Group Inc on Friday, a day before he was expected to be fired from the firm he helped found more than 40 years ago.
“Over the last five years, we have expanded into far more parts of the fixed income market and into other asset classes and other geographies, so the Pimco Total Return Fund does not define Pimco,” Pimco CEO Doug Hodge told Reuters on Sunday. “It’s an important flagship product of this firm, but it is not our only strategy.”
Influential pension consultant Mercer Investment Management downgraded its ratings on five Pimco funds this week, possibly triggering another wave of institutional investor outflows from the bond fund manager.
It followed Morningstar’s decision to downgrade its analyst rating on the flagship fund to “bronze” from “gold” late Monday, citing uncertainty about outflows and the reshuffling of management responsibilities after the exit of Gross.
All told, the Pimco Total Return Fund remains the world’s largest bond fund for now, Morningstar said.
Source: Reuters- Pimco Returns Fund investors hits record $23.5 billion
