Investors pulled $2.5 billion from Pacific Investment Management Co.'s flagship fund in July, the 27th consecutive month of outflows from what used to be the world's largest mutual fund.
The July withdrawals from the PIMCO Total Return Fund compare with $3 billion in redemptions in June, $2.7 billion in May and $5.6 billion in April, according to PIMCO. The fund's assets have plunged to $101 billion from a high of $293 billion in April 2013.
Investors took out record amounts of money amid concerns about lackluster returns, rising interest rates and the sudden departure last year of William H. Gross, the PIMCO co-founder who managed the Total Return Fund. The fund, which is now run by Scott Mather, Mark Kiesel and Mihir Worah, has returned 1.6% this year, outperforming 93% of peers, according to data compiled by Bloomberg.
“In the face of falling developed market sovereign yields, the fund's interest-rate strategies were neutral for performance,” as bets on the eurozone offset an underweighting on longer-term bonds, PIMCO said Tuesday in a statement. “Spread sector strategies and the fund's long-dollar positions broadly added to performance as spreads widened and the dollar rallied.”
CEO Douglas Hodge has said investors are returning to PIMCO as uncertainty abates. The “trajectory of flows has changed significantly over the last nine months,” Mr. Hodge said in June at the Morningstar Investment Conference in Chicago. More than 40 of its funds saw net new client money in July, the firm said in Tuesday's statement.
Flows now reflect investors searching for strategies that will better weather a rising interest-rate environment than a core fixed-income fund, PIMCO has said.
PIMCO Income Fund, run by Group Chief Investment Officer Daniel Ivascyn, attracted $1.4 billion in July, according to the statement. Its June subscriptions were the most for any active fund, and this year it has pulled in more new client money than any in its category, the firm said, citing data from Morningstar.
That fund, which at the end of June had $47.4 billion in assets, has returned 3.4% this year, topping 99% of peers, according to data compiled by Bloomberg. It has ranked in the top percentile against its peers over the past three and five years, too, the data show.
The Vanguard Total Bond Market Index Fund, a passive fund tracking a broad fixed-income benchmark, is now the world's biggest bond fund with $117 billion in assets at the end of June. That fund has gained 0.8% this year.
PIMCO had $1.52 trillion under management as of June 30, down from a high of about $2 trillion in 2013.