The Pimco Total Return Fund, the world's largest bond fund, trailed more than 70 percent of its peers in February despite returning to gains after a rough 2013, preliminary Morningstar data showed on Sunday.
The fund, run by Bill Gross, rose 0.517 percent in February, recovering from an annual loss of 1.92 percent in 2013, its worst annual performance since 1994. Put in perspective, the Barclays U.S. Aggregate Bond Index posted returns of 0.53 percent in February.
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The Pimco Total Return Fund's latest monthly performance beat just 29 percent of its peers, according to Morningstar. It has $237 billion in assets.
So far this year, the fund is posting returns of 1.877 percent, which is lagging 76 percent of its peers, according to preliminary data by Morningstar.
"Focusing on two months of weak relative returns for any fund, especially when the margin of difference between a fund and its category average is a barely perceptible 16 basis points, is making a mountain out of a molehill," Morningstar research analyst Eric Jacobson said on Sunday.
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"Pimco believes that fixed income should be a key part of any diversified portfolio, whether it be institutional or retail, and we still see plenty of opportunities in the global market for bonds for the patient investor," a spokesman for Pimco said.
Pimco oversees $1.91 trillion in assets. The firm's succession plan has been in the spotlight since January's stunning announcement that Mohamed El-Erian, its chief executive officer and co-chief investment officer, was resigning.
Gross, who had long anointed El-Erian as his heir apparent, has sought to reassure Pimco's clients about the new leadership structure put into place since the El-Erian announcement.
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Gross called the collection of six new deputy chief investment officers a "significant improvement" from Pimco's previous structure, which concentrated nearly all investment strategy decisions onto the shoulders of Gross and El-Erian.
El-Erian, who shared the chief investment officer title with Gross, will leave the Newport Beach, California-based firm later this month.
The investment firm named Dan Ivascyn, Andrew Balls, Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah as deputy chief investment officers.