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Pimco Total Return Fund lagged 95% of peers

Bill Gross
Andrew Harrer | Bloomberg | Getty Images
Bill Gross

The Pimco Total Return Fund, the world's largest bond fund run by Pimco co-founder Bill Gross, trailed 95 percent of its peers in March, increasing the risk that more money could flee the firm's flagship fund in the wake of a management shake-up.

According to preliminary data by Morningstar on Tuesday, the Pimco Total Return Fund was down 0.57 percent in March, and has returned 1.294 percent so far this year.

Pimco, based in Newport Beach, California, has been under intense pressure amid investor withdrawals from its mutual funds and underperformance by the Pimco Total Return, the firm's flagship fund with $236.4 billion in assets.

Gross, dubbed the Wall Street "Bond King," has also been dealing with a public falling-out with former heir-apparent Mohamed El-Erian, who shared the co-chief investment officer title.

In the first two months of 2014, investors pulled $5.1 billion from the Total Return Fund. March flow figures were set to be released as early as Wednesday, according to Morningstar.

"Having such short-term exposure has hurt the fund's performance relative to its peers," said Todd Rosenbluth, director of mutual fund research for S&P Capital IQ. The fund had an effective duration of 4.71 years at the end of February, according to data on the Pimco website.

The Pimco Total Return Exchange-Traded Fund, an actively managed exchange-traded fund designed to mimic the strategy of the flagship mutual fund, was up 0.084 percent in March but posted outflows of $53.4 million.

That marked the 11th straight month of withdrawals from the ETF, which has $3.4 billion in assets, according to Morningstar data. Pimco, a unit of European financial services company Allianz SE, had $1.91 trillion in assets under management as of Dec. 31.

—By Reuters

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