Pimco’s Total Return bond fund, managed by Bill Gross, has experienced the largest investor outflows in June 2013 as investors pulled nearly US$10 billion from the fund.
The withdrawals from the fund follow a market rout that has seen the worst performance for fixed income investors since the financial crisis.
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The withdrawals highlight the risk of a renewed investor retreat from bonds, prompting deeper losses for debt holders.
According to Morningstar, the outflow came as Gross’s bond fund handed investors a loss of 3.6% on a total-return basis for the second quarter of 2013 and the fund’s performance compares with a negative 2.32% return on its benchmark.
The outflows represent nearly 3.4% of the fund’s total assets at the beginning of the June 2013, leaving the fund with US$268 billion under management.
The June outflow has followed net redemptions of US$1.32 billion in May from the fund while the two-month outflows wiped out the net inflow of US$3.45 billion for the first four months of 2013, leaving the fund to post net redemptions of more than US$7 billion for the year through June 30.
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By GlobalDataBonds began suffering a broad selloff after the chairman of the Federal Reserve, Ben Bernanke, on 22 May said that the US central bank could reduce its bond-buying later this year if the economy looked strong enough.
Pimco Total Return had 37% of its portfolio invested in US Treasury securities at the end of May 2013.
The Total Return Fund has lost 2.9% of its investor’s money this year, trailing four-fifths of the 1,200 funds in its category.
