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By Jeremy Glaser and Timothy Strauts | 02-12-2015 04:00 PM

Continued Outflows a Yellow Flag at PIMCO

An additional $12.5 billion left PIMCO's flagship Total Return Fund in January, bringing the total outflow to more than $90 billion since Bill Gross' departure.

Jeremy Glaser: For Morningstar, I'm Jeremy Glaser.

I'm joined today by Tim Strauts, the senior markets research analyst at Morningstar. We're going to take a closer look at the January asset flows report.

Tim, thanks for joining me.

Tim Strauts: Thanks for having me.

Glaser: Let's start with PIMCO. This was one of the big stories of 2014's asset flows--the money that left as Bill Gross exited the firm. What's been happening there? Have those flows out of Total Return continued?

Strauts: Yes, they have actually. Last month negative $12.5 billion came out of PIMCO Total Return, which makes a total of $90.5 billion that has left PIMCO Total Return since Bill Gross has left, which is an astounding number. And it's starting to get a little concerning. We expected the large outflows in the first couple of months, but now we have five months of data, and the flows are continuing to be right around $10 billion a month. The firm just can't continue at this rate for too much longer.

Glaser: Is there a sign of where that money is going? Is it following Bill Gross to Janus, or are other competitors really taking that cash?

Strauts: Well, it's going to other firms--not Janus. The top five flowing active mutual funds were all bond funds that compete directly with PIMCO Total Return: MetWest Total Return Bond, DoubleLine Total Return, BlackRock Strategic Income, Dodge & Cox Income, and JPMorgan Core Bond.

Glaser: You mentioned they weren't going to Janus. What have their flows looked like?

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