By Min Zeng and Kirsten Grind
Investors pulled cash out of Bill Gross's Pimco Total Return
Fund in July for a 15th straight month, though the pace of
withdrawal dropped sharply from a month ago.
The flagship fund at Pacific Investment Management Co. suffered
an $830 million net outflow last month, which represents 0.4% of
its assets at the end of June, according to fund tracker
Morningstar.
The outflow eased compared with a net outflow of $4.5 billion in
June. It was the first time the fund's monthly outflow fell below
the $1 billion mark since the net cash withdrawal started more than
a year ago.
Assets in the Pimco fund were $223.1 billion at the end of July,
compared with $225.2 billion at the end of June.
The Pimco fund's size has dropped every month after hitting a
record high of $292.9 billion in April 2013. The fund remains the
world's biggest bond fund by assets.
Asset numbers also take into account performance of the fund,
while flow numbers don't.
Mr. Gross is co-founder and chief investment officer at Pimco,
which manages $1.97 trillion in global assets as part of Germany's
Allianz SE.
A Pimco spokesman that "a core bond allocation remains an
important part of a diversified portfolio, to generate returns and
manage risk over the long-term."
Pimco's assets under management grew $53 billion this year,
according to the statement.
Jeff Tjornehoj, head of Lipper Americas Research, said it is
premature to draw a conclusion on whether the fund is turning a
corner.
"It is just one month of reduced outflows," he said, adding that
February's outflow eased from the month before, but then outflows
"jumped up" the next month.
"There is not a good pattern to draw from here," he said.
Investors have kept a close eye on Pimco since Mohamed El-Erian,
groomed by Mr. Gross as a possible successor, quit as chief
executive and co-chief investment officer earlier this year. The
Wall Street Journal reported in February that Messrs. Gross and
El-Erian had clashed openly.
The Pimco fund received a negative total return of 0.52%,
reflecting price changes and interest payments, in July, according
to Morningstar.
That compares to a loss of 0.25% for the benchmark Barclays U.S.
Aggregate Bond Index, Morningstar said. The fund lagged behind 90%
of its peers for the period.
Write to Min Zeng at min.zeng@wsj.com and Kirsten Grind at
kirsten.grind@wsj.com
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