Pimco flexible bond funds trail majority of peers, rivals

[BOSTON] Bill Gross just can't catch a break. As investors flock to funds designed to make money even if interest rates increase, Mr Gross's Pacific Investment Management Co (Pimco) is alone among the biggest bond managers in suffering withdrawals from the strategy.

In a category that's been the most popular choice for fixed-income investors this year, the Pimco Unconstrained Bond Fund, has lost US$2.7 billion to redemptions. Similar offerings from Goldman Sachs Group, JPMorgan Chase & Co and BlackRock have seen a surge of deposits from investors seeking to avoid potential bond-market losses. The Pimco fund has trailed a majority of peers over the past five years, and has lagged behind most rivals over the past year.

"Pimco has kind of shot themselves in the foot here," said Steve Roge, a money manager with Bohemia, New York-based R. Roge & Co, where he helps oversee US$225 million. "In a new category where there are other choices, why is someone going to look at a fund that has been a bottom performer?" said Mr Roge, who owns several Pimco funds, but has no money in Pimco Unconstrained.