Our roundup of notable news:
- Pimco Redemptions Continue as Fund Performance Climbs
Pimco's woes continue after Bill Gross's abrupt departure, but the firm's flagship total return fund has been building a solid performance track. The total return fund witnessed about $11.6 billion in withdrawals in January, the 21st straight month of redemptions at the investment fund created and formerly run by 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, Bloomberg reports. Gross left Pimco on Sept. 26, prompting a combined $91.5 billion in redemptions from the fund from September through January.
Under its new leaders, Pimco Total Return 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.
"At this point, most people who've decided to exit have exited," Michael Rosen, chief investment officer at Angeles Investment Advisers LLC in Santa Monica, California, said in a telephone interview. "I think that's probably right unless performance starts deteriorating and then the floodgates will open again."
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.
Bond firms including TCW Group Inc. and DoubleLine Capital have benefited from Pimco's internal turmoil. DoubleLine, the Los Angeles-based 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. TCW's MetWest Total Return Bond Fund reported $5.2 billion in new client money last month, after taking in $24.3 billion in 2014.
BlackRock and Legg Mason were also helped by Pimco's turmoil. BlackRock, the world's largest money manager, attracted a record amount of new money in the fourth quarter. Last year was Legg Mason's first calendar year of investor deposits since 2007 as performance improved.
- Record $2 Billion Deposit Into BlackRock Bond ETF
A $5.4 billion ETF offered by BlackRock focusing on short-term Treasuries reported a record deposit of almost $2 billion earlier this month. The iShares Short Treasury Bond ETF saw a 58% increase in existing shares as a result of the inflow, Bloomberg reports. The eight-year-old fund focuses on debt maturing between one month and one year.
- Virtus Acquires ETF Provider
Virtus Investment Partners announced an agreement to acquire a majority interest in ETF Issuer Solutions, a New York City-based company that operates a platform for listing, operating, and distributing ETFs. The transaction will provide Virtus with manufacturing capabilities for both active and passive ETFs. ETFis was started in 2012 and currently offers two ETFs, with several others registered with the SEC. The Newfleet Multi-Sector Unconstrained Bond ETF will be the first new offering managed by a Virtus affiliate added to the ETFis platform.
- Institutions Seek SRI Choices from Managers
Socially responsible investing has become a frequent request of asset managers from institutional clients, according to new research from Cerulli Associates. More than half of the asset managers surveyed spoke of growing demand for SRI choices and environmental, social and governance mandates, the firm said. "Institutional sales teams report that clients and prospects are inquiring about this area as they seek to better understand the different aspects of sustainable investing," said Susana Schroeder, senior analyst at Cerulli. "Even professionals working in the trenches have witnessed this shift, including RFP teams, which have reported a rise in the number of RFPs with embedded ESG-related questions."
