Pimco Total Return posts
$3.2 billion outflows in December
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[January 07, 2017]
By Sam Forgione
NEW YORK (Reuters) - Investors pulled $3.2
billion from the Pimco Total Return Fund, once the world's largest bond
fund, in December, bringing last year’s total cash withdrawals to $16.1
billion, Morningstar data showed on Friday.
The Pimco Income Fund, which Pimco Group Chief Investment Officer Dan
Ivascyn told Reuters on Friday has increased its exposure to safer
securities in recent weeks, posted net inflows of $1.5 billion last
month for a total cash inflow of $13.7 billion in 2016.
Pimco's U.S. open-end mutual funds collectively posted $1.7 billion in
net outflows last month for 2016 total cash outflows of $16.6 billion.
Pimco Total Return, which hit a peak of $292.9 billion in assets under
management in April 2013, now has $75.7 billion in assets. The Income
Fund, overseen by Ivascyn and widely seen by investors and analysts as
Pimco's new flagship fund, now has assets under management of $70.3
billion, according to Morningstar data.
Last year, the Pimco Total Return Fund returned 2.6 percent, lagging 63
percent of its intermediate-term peer category, according to
Morningstar. For the same period, the Pimco Income Fund returned 8.3
percent, surpassing 63 percent of its multisector bond category.
In December alone, the Total Return Fund gained 0.7 percent to beat 94
percent of its peers, while the Income Fund gained 1 percent to beat 61
percent of its peers, Morningstar data showed.
The Pimco Income Fund's exposure to higher-quality securities such as
U.S. Treasuries, U.S. agency mortgages, and Australian government bonds
has risen significantly in the past several weeks while the fund's
exposure to riskier U.S. corporate bonds has fallen, Ivascyn said.
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The offices of Pacific Investment Management Co (PIMCO) (L) are
shown in Newport Beach, California August 4, 2015. REUTERS/Mike
Ivascyn said that move had been implemented given uncertainty surrounding U.S.
President-elect Donald Trump's policies and because the market seemed to be
factoring in an extremely low probability of recession and other sources of
"We think U.S. Treasury bonds, high-quality bonds, are priced more fairly than
at any point in the last year or so," he said. Ivascyn said that, despite
Treasuries being fairly priced currently, the benchmark 10-year yield could
still rise to the low 3 percent range over the next 12 months.
U.S. 10-year yields, which hit a more than two-year high of 2.641 percent in
mid-December, were last at 2.419 percent.
Pacific Investment Management Co, a unit of German insurer Allianz SE, is based
in Newport Beach, California. It had about $1.55 trillion in assets under
management at Sept. 30.
(Editing by Jeffrey Benkoe; Editing by Lisa Shumaker)
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