May not a merry old month for Bill Gross

Not for Bill Gross, whose bets on Treasuries backfired in May. The damage: Pimco's Total Return Fund lost nearly 2%, putting it behind almost all its rival funds.
JUN 04, 2013
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--

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