(Bloomberg) -- Pacific Investment Management's biggest mutual fund suffered about $11.6 billion in withdrawals in January, the 21st straight month of redemptions at the strategy once managed by bond manager Bill Gross.
The withdrawals slowed from $19.4 billion in December, and brought assets in the Pimco Total Return Fund to $134.6 billion as of Jan. 31, according to data from the Newport Beach, California-based firm. Gross left Pimco on Sept. 26, prompting a combined $79.9 billion in redemptions from the fund from September to December.
The $1.68 trillion money manager, seeking to reassure investors and stem redemptions, has named top performers to run its biggest fund and is pointing to a rebound in returns since Gross left. Under its new managers, Pimco Total Return Fund advanced 2.98% in the past three months, beating 94% of peers, according to data compiled by Bloomberg. The fund has climbed 2.45% so far this year, also beating 94% of similarly managed funds.
We have great performance to show over the last month and four months, Scott Mather, who took over management of Pimco Total Return fund in September along with Mark Kiesel and Mihir Worah, said in an interview. The real strength of our process is delivering those returns over a market cycle.
Performance was helped by a wager on U.S. government debt, which accounted for 43% of assets as of Dec. 31, according to Pimcos website. Treasuries returned 2.9% this year through Jan. 31, according to Bank of America Merrill Lynch index data, as investors flocked to havens amid renewed political turmoil in Greece and a bond-buying program by the European Central Bank.
Pimco Total Return suffered the worst client withdrawals in the history of fund management last year as investors pulled a record $105 billion, a year in which the firm lost both of its co-chief investment officers Gross and Mohamed El-Erian. The funds assets peaked at $293 billion in April 2013, before the Federal Reserve hinted it would unwind U.S. stimulus measures. Since then, assets have plunged by more than half as investors pulled money to protect themselves from rising interest rates and as performance faltered.
Pimco Total Return trailed a majority of peers for the second straight year in 2014 after missing a rally in longer- term bonds and betting that inflation would rise. The fund returned 4.7% in 2014, trailing 54% of comparable funds, according to data compiled by Bloomberg.
Redemptions at the fund accelerated after Gross, who co- founded Pimco in 1971 and built it into one of the nations largest money managers, left after clashing with senior executives. Gross joined Denver-based Janus Capital Group El-Erian, who shared the role of CIO with Gross and served as Pimcos chief executive officer, announced his resignation from the firm in January 2014. He is now chief economic adviser at Pimcos parent, Allianz SE, and a contributor to Bloomberg View.
Bond firms including DoubleLine Capital have benefited as investors review their investments withPimco. Los Angeles-based DoubleLine, the bond firm co-founded by Jeffrey Gundlach, received a record $3 billion in January, after adding $7.4 billion from September through the end of the year, the Los Angeles-based firm said Monday in a statement. BlackRock, the worlds largest money manager, attracted a record amount of new money in the fourth quarter, helped by Pimcos turmoil.
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