(Bloomberg) -- Redemptions at Pimco’s biggest mutual fund slowed to the lowest since Bill Gross left the firm, as performance rebounded.
Clients pulled $8.6 billion in February, down from $11.6 billion in the prior month, bringing assets in the Pimco Total Return Fund to $124.7 billion, according to data from the Newport Beach, Calif.-based firm. Since Gross left in September, a combined $100 billion was pulled from the fund.
“This is a slow, drawn-out bleed where institutions change managers after much debate,” said Todd Rosenbluth, director of mutual-fund and exchange-traded fund research at S&P Capital IQ in New York. He said the fund still needs to show a longer-term track record of success to stem the withdrawals.
The redemptions are the lowest in six months as the fund, once the world’s largest, rebounded under the new management team Pimco put in place following Gross’s surprise departure. Pimco parent Allianz last month reported an unexpected decline in fourth-quarter profit as redemptions at Pimco weighed on its asset management unit.
“I am watching outflows at Pimco on a daily basis,” Michael Diekmann, the German insurer’s chief executive officer, told reporters.
While withdrawals were at the “upper end of our expectations” when Gross left, they are now coming down, Diekmann said. Figures for February were “in line” with those seen in January, he said, adding that he remains optimistic for 2015 because of Pimco’s “solid” performance.
PERFORMANCE REBOUND
Last year the fund suffered the worst withdrawals in the history of fund management as investors pulled a record $105 billion. The fund’s assets have declined from a peak of $293 billion in April 2013 as the Federal Reserve’s hint it would unwind stimulus measures sparked concern over rising interest rates.
Pimco Total Return, now run by Mark Kiesel, Scott Mather and Mihir Worah, has advanced 1.44% this year, outperforming 92% of similarly managed funds, according to data compiled by Bloomberg. Since Gross left on Sept. 26, it has returned 2.8%.
Gross, who co-founded Pimco in 1971 and built it into one of the world’s largest investment firms, left after losing a power struggle with senior executives. He now runs the $1.46 billion Janus Global Unconstrained Bond Fund at Denver-based Janus.
