Investors in June continued to pull money from Pimco's flagship bond fund, despite the high-profile return of one of the firm's top executives.
The Pimco Total Return fund (NASDAQ:PTTAX-O) registered its 14th consecutive month of outflows as investors pulled $4.5 billion, which actually was an increase from May's $4.3 billion, according to Morningstar. Those outflows came despite the return of Paul McCulley, who rejoined Pimco in late May as managing director and chief economist, and as the fund gained 0.34 percent, about double that of its peers.
Assets for the fund contracted to $225 billion, though it remains the largest mutual fund in the world and boasted $292.9 billion in April 2013. Pimco manages just below $2 trillion overall.
Total Return has underperformed its benchmark and its peers in 2014. The fund has returned 3.51 percent, compared to 3.93 percent for the Barclays Aggregate Bond index, and the 4.09 percent of its category. It lost 2.3 percent in 2013, which also was worse than its competitors.
However, on a three-month trailing basis the fund is up 2.18 percent, which beats the Barclay index's 1.93 percent.
Pimco officials declined comment specifically on the fund flow issue.
"Patient investors are rewarded over the long-term by sticking with core bond allocations in a diversified portfolio," the firm said in a statement. "The Pimco Total Return fund has outperformed its benchmark and a majority of its peers over the last one, three, five, 10 and 15 years.
McCulley was brought back to the firm to steady the ship after former CEO Mohamed El-Erian left this year in an episode that provided some embarrassing headlines. Pimco founder Bill Gross came under scrutiny for an apparently tense personal relationship with El-Erian, a situation exacerbated by the continuous exit of funds.
One piece of good news for the firm is that its Total Return exchange-traded fund (NYSE Arca: BOND) brought in $33 million in new money, raising its assets to $3.4 billion. The fund, introduced in March 2012, has lost $212 million in 2014, according to ETF.com. It is up about 3.7 percent in price year to date.
-By CNBC's Jeff Cox
- Mutual Funds
- mutual fund