PIMCO Total Return Fund Net Outflows $1.5B in November as Withdrawals Wane

Dec 2 2015 | 10:13pm ET

By Jennifer Ablan (Reuters) - Pacific Investment Management Co.'s flagship fund posted its smallest monthly cash withdrawal this year in November at $1.5 billion, according to the Newport Beach, California firm's website on Wednesday.

The slowdown in outflows from the PIMCO Total Return Fund, with assets under management of $91.9 billion, comes as PIMCO has posted a sharp improvement in the fund's performance.

The Total Return fund has delivered a return of 1.29 percent year to date through Dec. 1, beating 80 percent of similar bond funds. For the month to Dec. 1, the fund is up 0.27 percent, surpassing 94 percent of similar bond funds, according to Morningstar.

"We've felt for some time that markets were being overly pessimistic about the Fed's chances of successfully reflating the U.S. economy and beginning the normalization process," said Scott Mather, a manager on Total Return and PIMCO’s CIO for core strategies. "Our positions in November benefited as inflation expectations and monetary policy divergence themes became more realistically priced."

Across PIMCO’s broader complex, more than 25 funds continued to have positive inflows during November across income, mortgages, money market/short term, municipals, commodity and Research Affiliates equity strategies.

Recent market conditions and long-term performance have attracted investors to PIMCO’s top-performing income strategies.

For example, the PIMCO Income Fund, overseen by Group CIO Dan Ivascyn, reached $52.4 billion in assets under management in November, reflecting $13 billion in inflows since the start of the year, driven by strong performance, including a return of 3.54 percent year-to-date after fees.

"In the Income Fund, a variety of investments benefited as the U.S. housing market continued to stabilize and certain growth divergence themes and higher-quality emerging market exposures also added to returns," said Ivascyn, who manages the Income Fund along with Alfred Murata.

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