Bloomberg News

Gross’s Pimco Total Return Drew $2.7 Billion Last Month

May 02, 2012

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., boosted holdings of mortgages last month to the most in almost three years while cutting Treasuries to the least since December. Photographer: Andrew Harrer/Bloomberg

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., boosted holdings of mortgages last month to the most in almost three years while cutting Treasuries to the least since December. Photographer: Andrew Harrer/Bloomberg

Bill Gross’s Total Return Fund at Pacific Investment Management Co., the world’s biggest mutual fund, has grown to a record $258.7 billion, the company reported on its website.

Total Return Fund attracted $2.7 billion of investor deposits in April, according to Morningstar Inc. (MORN:US) The fund has returned 4.4 percent this year, beating (PTTRX:US)98 percent of its peers, according to data compiled by Bloomberg. Investors piled into bonds in April, seeking a haven from slowing U.S. economic growth and Europe’s debt crisis.

Fixed-income assets -- from Australian government debt to U.S. Treasuries to global junk bonds -- gained 0.7 percent last month including reinvested interest, Bank of America Merrill Lynch data show. Bonds were the only investments to provide positive returns for the first time since the start of 2008, according to data compiled by Bloomberg. The MSCI All-Country World Index of stocks lost 1.1 percent including dividends.

Pimco attributed growth in the Total Return Fund to “investors around the world,” on its website yesterday. The company, based in Newport Beach, California, is a unit of the Munich-based insurer Allianz SE. (ALV)

U.S. Economy Slows

U.S. gross domestic product growth slowed to a 2.2 percent annual pace in the first quarter from 3 percent in the prior three months, the Commerce Department reported April 27. Standard & Poor’s cut Spain’s debt rating April 26, increasing concern European governments won’t be able to pay their debts.

Gross, who eliminated Treasuries from the fund more than a year ago, reversed his position and boosted the portion of assets in U.S. government and Treasury debt to 38 percent as of the end of January. Since then he’s reduced Treasuries to 32 percent and raised the fund’s holdings of mortgages to 53 percent as of March 31, according to Pimco’s website.

Investors pulled about $3 billion from the Total Return Fund in the three months ended Dec. 31, bringing withdrawals last year to about $5 billion, according to Chicago-based Morningstar.

The fund returned 4.2 percent last year, lagging behind 69 percent of its competitors, after Gross missed a rally in U.S. Treasuries and put money into riskier assets.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net; Alexis Leondis in New York at aleondis@bloomberg.net.

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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Companies Mentioned

  • MORN
    (Morningstar Inc)
    • $64.41 USD
    • 1.57
    • 2.44%
  • PTTRX
    (PIMCO Total Return Fund)
    • $10.94 USD
    • -0.01
    • -0.09%
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