PIMCO Stems Bleeding as Outflows Slow to $3B in May

Jun 2 2015 | 3:10pm ET

The torrent of money that has cascaded out of Pacific Investment Management Corp’s flagship Total Return Fund since the departure of Bill Gross appears to be slowing down.

Investors pulled approximately $3 billion from the fund during May, according to the Wall Street Journal, which may sound like a lot until one considers that this was the smallest exodus since Gross left the fund last fall. 

The Total Return Fund now has around $110.4 billion in assets under management, down from a peak of $293 billion. The May withdrawals were the 25th consecutive month investors have pulled money from the fund, which invests primarily in U.S. Treasury securities and corporate bonds. 

The stabilization may be related to recent performance. The Total return Fund has booked a 1.23% gain so far this year through the end of May, handily beating the 0.99% returned by benchmark Barclays U.S. Aggregate Bond Index and better than 61% of its peers, according to Morningstar data. Industry observers have speculated that some managers who rushed to the exits after Gross’s abrupt resignation have started to return, drawn back by the results.

Gross’s co-CIO, Mohamed El-Erian, also left PIMCO last year, leaving one of the world’s most successful bond managers rudderless precisely when the prospect of a normalization in interest rate policy loomed. 

The Total Return Fund is now managed a three-person team consisting of Scott Maher, Mark Kiesel and Mihir Worah. It is overseen by group CIO Daniel Ivascyn.


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