Bill Gross’s Pacific Investment Management Co. was the only provider among the top 10 U.S. mutual-fund families to suffer net withdrawals last month, according to a report from Morningstar Inc.
Pimco’s mutual funds lost $2.49 billion to client redemptions in February, bringing net withdrawals to $56.1 billion in the past year, Chicago-based Morningstar estimated today in a report. Mr. Gross’s $236 billion Total Return Fund, the Newport Beach, Calif., firm’s largest fund, had the heaviest redemptions in the industry, with a net $1.6 billion pulled last month, Morningstar said.
Among the 10 biggest fund providers, Pimco has the highest concentration in fixed income, with more than 90% of its $1.91 trillion in assets in bond-related strategies. The firm has been under pressure in the past 12 months amid underperformance by Total Return and withdrawals, as well as a leadership shakeup spurred by the announced resignation of Chief Executive Officer Mohamed El-Erian in January.
Pimco Total Return Fund declined 0.4% in the past 12 months through March 11, trailing 81% of rivals and underperforming the Barclays U.S. Aggregate Index, according to data compiled by Bloomberg. This year, the fund has advanced 1.6%, behind 53% of peers.
Pimco is suffering redemptions even as investors return to bond mutual funds, depositing about $3.5 billion into the strategies last month through Feb. 26, according to estimates from the Investment Company Institute, a Washington-based trade group. Pimco Total Return had its 10th straight month of withdrawals in February, although redemptions were the lowest amount since May, when former U.S. Federal Reserve Chairman Ben S. Bernanke signaled that the central bank would start unwinding its unprecedented asset purchases.
Pimco’s $26 billion Pimco Unconstrained Bond Fund, which Mr. Gross began managing in December, had withdrawals of $706 million in February, Morningstar said, as investors turned to Goldman Sachs Strategic Income Fund, BlackRock Strategic Income Opportunities Fund and JPMorgan Strategic Income Opportunities Fund. Clients pulled $510 million from the $15 billion Pimco High Yield Fund last month despite industrywide deposits into speculative-grade bond funds, according to Morningstar.
The redemptions from Pimco’s long-term mutual funds, which totaled $518 billion in assets as of the end last month, according to Morningstar, don’t include institutional accounts.
Mark Porterfield, a spokesman for Pimco, didn’t immediately respond to an e-mailed request for comment on the redemptions.