May not a merry old month for Bill Gross

Bets on Treasuries backfire as Total Return Fund loses nearly 2%

Jun 1, 2013 @ 9:00 am

Bill Gross, Pimco
+ Zoom
Gross: A June swoon next? ((Photo: Bloomberg News))

Bill Gross's Pimco Total Return Fund (PTTRX), the world's largest mutual fund, declined 1.9 percent this month, the biggest monthly loss since September 2008.

The performance of the $293 billion Total Return Fund puts it behind 94 percent of similarly managed funds through May 30, according to data compiled by Bloomberg. The fund's allocation to Treasuries has hindered performance as government-debt securities fell 1.8 percent in May as of yesterday, headed for the steepest monthly loss in three years, according to Bank of America Merrill Lynch indexes.

Gross raised the holdings of Treasuries in his flagship fund to 39 percent as of April 30, the highest level since July 2010, from 33 percent as of March 31. He's increased the proportion of U.S. government securities every month this year since February. In 2011, Gross's fund lost an estimated $5 billion to withdrawals, according to Morningstar Inc. (MORN), after he eliminated U.S. Treasuries early in the year and missed a rally.

In a Twitter message today, Gross said Pimco likes five-to 10-year Treasuries and that the economy is growing at 1.7 percent, with “no tapering for now.”

Pimco Total Return Fund fell 0.2 percent this year, ahead of 58 percent of rivals, and has gained an annual average of 7.7 percent over the past five years, beating 93 percent of peers, according to data compiled by Bloomberg.

The fund's monthly return was reported earlier today by the Wall Street Journal. Mark Porterfield, a spokesman for Newport Beach, California-based Pimco, said Gross wasn't available to comment on the fund's returns. Pimco is a unit of Munich-based insurer Allianz SE (ALV) and manages $2.04 trillion in assets.

--Bloomberg News--

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Voya's Tom Halloran: How to change the lack of diversity in financial services

Voya Financial Inc. has a board of directors that is 40% female, and the emphasis on diversity and inclusion carries through to the firm's advisory business, says Tom Halloran, president of Voya Financial Advisors.

Latest news & opinion

The appeal and pitfalls of holding unconventional assets in retirement accounts

While non-traditional asset classes held in individual retirement accounts may have return and portfolio diversification benefits, there are "unique complexities" that limit their value for most investors.

Wells Fargo's move to boost signing bonuses could give it a lift

Wirehouse is seen as trying to shore up adviser ranks that took a hit after banking scandal

New Jersey fines David Lerner Associates for nontraded REIT sales

Firm will pay $650,000 for suitability, compliance and books and records violations.

Report predicts $400 trillion retirement savings gap by 2050

Shortfall driven by longer life spans and disappointing investment returns.

Wells Fargo will ramp up spending to lure brokers

Wirehouse, after losing 400 brokers in first quarter, is bucking trend among rivals who have said they are going to cut back on spending big bucks recruiting veteran advisers

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print