New York: Investors yanked another $2.7 billion from the Pimco Total Return Fund in May, their 25th straight month of withdrawals, but less than half the previous month`s pace.
The outflows in May leave the Pimco Total Return Fund, which lost its crown as the biggest bond fund in the world in April, with assets of $107.3 billion at month`s end, Pacific Investment Management Co said on Tuesday.
The Pimco Total Return Fund, long managed by legendary bond manager Bill Gross, hit a peak of $292.9 billion in assets under management in April 2013.
Gross, long known as the `Bond King,` exited Pimco suddenly last September for smaller rival Janus Capital Group Inc .
Pimco, a unit of Germany`s Allianz SE , has seen over $130 billion of net withdrawals from its open-ended funds since Gross` departure even as performance has improved.
The Vanguard Total Bond Market Index Fund, a passive product tracking a broad fixed-income benchmark, became the world’s biggest bond fund with $117.3 billion in assets at the end of April.
Outflows from the flagship Pimco Total Return Fund, which Gross managed since 1987, had been running around an average of $7 billion to $8 billion a month after peaking at $23.5 billion in September.
The Pimco Total Return Active Exchange-Traded Fund an actively managed ETF intended to mimic the strategy of the company`s flagship mutual fund, posted net outflows of $53.9 million in May, ending the month with $2.6 billion in assets under management, according to Morningstar data on Tuesday.
The Pimco Total Return ETF hit its peak in assets under management in April 2013 with $5.2 billion, Morningstar said.
Pimco had assets under management of $1.59 trillion as of March 31.
Last month`s cash withdrawals from the Pimco ETF were the first monthly outflows of the year, Morningstar said, noting that year-to-date the Pimco Total Return Active ETF had $253 million of inflows collectively.
SPDR DoubleLine Total Return Tactical ETF , co-managed by widely followed investor Jeffrey Gundlach, had net inflows of about $182 million in May, bringing its assets under management to $599 million. The day-to-day management of the SPDR DoubleLine Total Return Tactical ETF, which started with $112.5 million in assets on Feb. 23, is led by Gundlach, Philip Barach and Jeffrey Sherman.
On a year-to-date basis, the Pimco ETF has outperformed 87 percent of its peer category, with returns of 1.60 percent, Morningstar said as of Monday. But on a one-month and three-month basis, the ETF has struggled: For the one-month return as of June 1, the portfolio was down 0.33 percent, trailing 65 percent of its peer category. On a three-month basis ending June 1, the Pimco ETF was down 0.84 percent, lagging 88 percent of its peer category, according to Morningstar.
"Unlike mutual fund investors that tend to be more patient and long-term focused, those in the Pimco Total Return ETF that can trade intraday may have shorter time horizons," said Todd Rosenbluth, director of ETF & Mutual Fund Research at S&P Capital IQ. "As an active ETF lags its peers, investors question whether the higher expense ratio is warranted. The recent underperformance likely played a role."
