Gross’s Total Return Loses $3.1 Billion to March Withdrawals

Apr 01, 2014 7:23 pm ET

(Updates with comment from Pimco spokesman in fourth paragraph.)

April 1 (Bloomberg) -- Bill Gross’s Pimco Total Return Fund suffered its 11th straight month of withdrawals in March as the world’s largest bond fund trailed peers, according to Morningstar Inc.

Clients withdrew an estimated $3.1 billion from Pacific Investment Management Co.’s $232 billion bond fund, formerly the world’s largest mutual fund, Chicago-based Morningstar said in an e-mail today. Industrywide, investors returned to bond funds, putting an estimated $11.6 billion into bond funds last month through March 19, according to the Investment Company Institute.

Gross’s fund advanced 1.3 percent this year through March 31, trailing 73 percent of peers, according to data compiled by Bloomberg. In March, the fund fell 0.6 percent to trail 95 percent of peers as Federal Reserve Chairman Janet Yellen outlined plans to increase interest rates, undermining a bet by Gross.

“Much of the focus of flows data is centered on investor concern with core bond strategies, but there is also considerable interest from institutional and retail investors in fixed-income strategies which provide a specific solution, protect against rising rates and offer diversification, liquidity and income -- all critical components of any diversified portfolio,” Mark Porterfield, a spokesman for Newport Beach, California-based Pimco, said in an e-mail.

Fund Performance

Investors pulled a record $41.1 billion from Pimco Total Return in 2013, according to Morningstar. They withdrew $3.5 billion in January and $1.6 billion in February, Morningstar said.

Over the past five years, Pimco Total Return advanced at an annual 6.9 percent, ahead of 57 percent of similarly managed funds, according to data compiled by Bloomberg.

Morningstar estimates deposits or withdrawals for mutual funds by computing the change in assets on a monthly basis that isn’t accounted for by performance. The fund’s actual withdrawals or deposits may differ from Morningstar’s estimates because of the timing of purchases and redemptions or dividend distributions.