PIMCO Total Return Weathers First Round of Outflows
Our analysis of one-week performance shows no ill liquidity effects from Bill Gross’ departure.
Based on its performance since the departure of Bill Gross on Friday, Sept. 26, 2014, PIMCO Total Return (PTTRX) appears to have weathered the initial flurry of outflows without hurting performance. This suggests that the fund had more than enough liquidity in its holdings to manage the outflows. The fund's I shares gained 0.4% last week, lagging the Barclays U.S. Aggregate Bond Index by 1 basis point and finishing just outside the top quartile (26th percentile) of the intermediate-term bond Morningstar Category. These numbers cover the five market days following Gross' announcement.
Based on our internal flow data and PIMCO's public comments, we estimate that PIMCO Total Return suffered outflows of about $20 billion beginning with market close on Friday, Sept. 26 through Tuesday, Sept. 30, with the Monday and Tuesday outflows hovering around $5 billion per day. PIMCO doesn't release daily outflows, so we don't have numbers for the rest of the week ending Oct. 3, although it appears certain that outflows continued at elevated levels. Prior to Gross' departure, the fund had been averaging about $140 million per day in outflows this year.
Jon Hale does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.