Investors pulled cash from the Pimco Total Return Fund for a
15th straight month in July, though outflows from the world's largest bond fund
were substantially smaller than previous months. According to Morningstar, the
fund had net outflows of $830 million in July, the first time its monthly
outflow was less than $1 billion since the net cash withdrawals started more
than a year ago.
The fund has had about $65 billion in outflows since May
2013, the data showed. It had $223 billion in assets at the end of last month,
down from a peak of $292.9 billion in April 2013. The continuation of the
fund's record outflow streak came as it posted a negative 0.52 percent return
in July, lagging 90 percent of its peers. The fund is up 3.16 percent for the
year as of Friday and trails 77 percent of its peers.
Analysts have said cash outflows began last year due to weak
returns - the fund declined 1.9 percent in 2013, its worst performance in
nearly two decades. In June, the Pimco Total Return Fund posted $4.5 billion in
Pimco, a unit of European financial services company Allianz
SE, had $1.97 trillion in assets as of June 30. Allianz's second-quarter
earnings results are due on Friday, with net profit seen dropping 2.7 percent
from a year ago, dragged down in part by asset management.
According to Morningstar, the Pimco Total Return
Exchange-Traded Fund, an actively managed ETF designed to mimic the strategy of
the flagship mutual fund, had net inflows of $43 million in July, its second
month of inflows. Total assets in the fund at the end of July were $3.5
The Pimco Total Return Fund's three-year Sharpe ratio – a
measure closely followed by pension funds, foundations and endowments — was
hovering at 0.94, as of July 31. That trails the Barclays Aggregate at 1.11. The
higher a fund's Sharpe ratio, the better a fund's returns have been relative to
the risk it has taken.
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