Pimco Total Return Fund stabilizes while Pimco Income gains
By Jennifer Ablan
NEW YORK (Reuters) - Investors pulled $3 billion (2 billion pounds) in assets from Pacific Investment Management Co's flagship fund in June, compared with $2.7 billion the previous month, in another sign Pimco is stabilizing since last fall's departure of star manager Bill Gross.
The Pimco Total Return Fund had cash withdrawals of $5.6 billion in April and $7.3 billion in March, according to the Newport Beach, California-based firm. Assets in the fund have plunged to $102.8 billion from a peak of $293 billion in April 2013.
The Pimco Income Fund, overseen by Pimco Group Chief Investment Officer Dan Ivascyn who succeeded Gross, continues to see huge investor appetite, posting about $1.7 billion in inflows in June, according to Pimco's website on Thursday.
In the multi-sector bond category, the $47.4 billion Pimco Income Fund , is outperforming 98 percent of its peer category. The fund is posting returns of 3.06 percent and outperforming its category by 2.34 percentage points. On a 12-month basis, Pimco Income returned 3.76 percent, outperforming peers by 4.38 percentage points and surpassing 98 percent of its peers.
"The Income Fund has continued its strong record in the first half and remains one of the better Pimco alternatives with a stable management team," said Todd Rosenbluth, director of ETF & Mutual Fund Research at S&P Capital IQ.
Pimco CEO Douglas Hodge said last week at the Morningstar Investment Conference: "We recognise that the organizational changes that have taken place at Pimco over the last 18 months have created change and created uncertainty and anxiety" among clients.
On Sept. 26, Gross shocked the investment world by leaving his post to join smaller rival Janus Capital Group Inc . The move followed record outflows from Pimco's flagship portfolio and clashes with other top executives.
Gross's exit, eight months after his top deputy Mohamed El-Erian quit amid acrimony, quickened speculation in the bond market about leadership uncertainties and accelerating outflows at one of the largest bond firms.
But those jitters have diminished and led to better flow patterns, Hodge said, helped by steady performance. The Pimco Total Return Fund is surpassing 80 percent of its intermediate-term peer category so far this year.
"As we look at the last two or three months, we're starting to see the arrows come back up. I think that's the resolution of the uncertainty," Hodge said.
With $1.59 trillion in assets under management, Pimco remains one of the most influential fixed income managers.
(Reporting By Jennifer Ablan; Editing by Diane Craft and David Gregorio)
