Investors pull about $1 billion from Pimco Total Return Fund in April

Reuters

Published May 10, 2016 03:56PM ET

Investors pull about $1 billion from Pimco Total Return Fund in April

By Jennifer Ablan

NEW YORK (Reuters) - The Pimco Total Return Fund posted net outflows of approximately $1 billion in April amid lagging returns, leaving the portfolio's assets under management at $87 billion, according to Pimco's website.

Pacific Investment Management Co, or Pimco, said in a statement on its website on Tuesday that its fund is posting returns of 0.31 percent for the one year ended April 30 while the Barclays (LON:BARC) U.S. Aggregate Index is up 1.96 percent for the same period.

For the three-year return, the Pimco Total Return Fund is up 1.53 percent while the Barclays index is up 2.50 percent. For the five-year return, the Pimco Total Return Fund, which is the largest actively managed bond fund in the world, is up 3.66 percent while the Barclays index is up 3.78 percent.

"The fund is trailing its Lipper peers and the Barclays Aggregate Index year-to-date through April," said Todd Rosenbluth, director of exchange-traded and mutual fund research at S&P Global Market Intelligence.

"Such relative underperformance is not changing investor sentiment. The fund needs to outperform to recapture outflows lost over the past two years."

The managers of Pimco Total Return Fund, once managed by Bill Gross, are Mark Kiesel, Scott Mather and Mihir Worah.

Pimco, based in Newport Beach, California, said Treasury Inflation-Protected Securities were one of the biggest contributors to the fund's performance last month, as inflation expectations continued to march higher.

Gains from non-agency MBS positions also contributed, as did interest rate strategies, particularly those in the U.S. and U.K.

"These gains were enough to offset detractions from an underweight to corporate credit as well as the fund's currency strategies," Pimco said.

Like BlackRock Inc (NYSE:BLK) and Janus Capital Group Inc, Pimco adds dividend reinvestments into its inflow figures. Research organizations such as Morningstar and the Investment Company Institute, along with many fund managers, including Vanguard, Fidelity and DoubleLine, exclude reinvestments and treat only fund share purchases as inflows.

All told, the Pimco Income Fund, run by group chief investment officer Dan Ivascyn, had an additional $1.5 billion of inflows in April, bringing the total inflows in 2015 and so far in 2016 to $19.7 billion, Pimco said.

Pimco Income's assets under management stood at $57.9 billion, as of April 30.