Pimco fund outshines most peers in first year after Gross exit

Los Angeles

INVESTORS who pulled an estimated US$52.7 billion from the Pimco Total Return Fund this year may feel like freeway drivers who changed lanes only to see themselves falling behind traffic.

The erstwhile largest bond mutual fund outperformed 89 per cent of peers in the first calendar year since the ouster of its former manager Bill Gross, returning almost one per cent through Dec 28, according to data compiled by Bloomberg. Among those it bested were four of the five funds with the largest influx of new money this year through Nov 30 that Bloomberg classifies as following total return strategies.

The performance, a rebound from two years in which it trailed a majority of peers, helped slow a torrent of redemptions following the September 2014 departure of Mr Gross, who had built Total Return into a US$293 billion behemoth at its peak in 2013. The fund, which now has US$92 billion in assets, avoided the debt of energy companies, emerging markets and other high-yield bonds that caused losses for many in…