PIMCO boosts fees on share classes

Pacific Investment Management Co. is raising fees as of Oct. 1 on the institutional share classes of several funds, including Pimco High Yield Institutional (PHIYX), Pimco Low Duration (PTLDX), Pimco Moderate Duration (PMDRX) and Pimco Total Return (PTTRX), according to Morningstar Inc. The administration and supervisory fees for the Low Duration and Total Return funds will increase by 0.03%. The fees for the Moderate Duration fund will increase by 0.01% and for the High Yield fund by 0.05%. “With these particular funds, the administrative fees have held constant for about 13 years,” said Lawrence Jones, fund analyst with Chicago-based Morningstar Inc. “We thought the economies of scale probably would have been achieved, and we hoped that the fee increases wouldn’t need to be reached.” But the firm reported to Morningstar that decisions on fees are made relative to the funds’ competitive grouping. “The board looked over fees, trying to position them competitively in their groups,” Mr. Jones said. “They were already fairly competitive on the institutional side. It’s a matter of being competitive in the fund grouping that they are looking at,” Mr. Jones said. “We have been criticizing them for having some fairly expensive retail share classes,” he said. Pimco officials did not return a call seeking comment. At the same time, the Newport Beach, Calif.-based firm is cutting fees on its retail D share classes of All Asset D (PASDX) and All Asset All Authority D (PAUDX), which will both be reduced by 0.2%, Morningstar said. Fees on the D share classes of Pimco Foreign Bond (unhedged), D (PFBDX) and Pimco Foreign Bond (USD-Hedged) D (PFODX), Real Estate Real Return Strategy D (PETDX) and Real Return D (PRRDX) will be reduced by 0.05%. Also, Real Return Asset’s institutional shares (PRAIX) will drop by 0.05%. As of June 30, the firm had $829.5 billion in assets under management.