PIMCO’s Gross suffers annual outflows for first time

Bill Gross’ flagship bond fund has been hit with a wave of redemptions which has left it recording annual outflows for the first time in its history.

The $240bn Total Return fund, the world’s largest bond fund, saw $5bn in outflows last year according to Morningstar data, the Financial Times reported.

It is the first time the fund has failed to post inflows since its inception in 1987, and comes following a spell of weak performance.

The fund has underperformed its benchmark over the past year, with Gross’ bet against US Treasuries hurting performance as investors flocked to the safe haven to shield against excessive market volatility.

Data from Morningstar shows investors took out $1.4bn from the Total Return fund in December alone.

Since November 2010 Morningstar said $13.7bn has been pulled from Gross’ flagship fund.

Gross himself admitted in October his one year performance was not good enough and apologised to investors.

He conceded he had positioned the fund incorrectly to benefit from an interest rate rise, which did not materialise.

“This year is a stinker. Pimco’s centrefielder has lost a few fly balls in the sun,” said Gross at the time.


This article was first published on Investment Week

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