Pimco Total Return Fund rises 1.8 percent in September - Morningstar


NEW YORK, Oct 1 (Reuters) - The Pimco Total Return Fund, theworld's largest mutual fund, rose 1.8 percent in September afterthe Federal Reserve kept its bond-buying program unchanged,preliminary data from investment research firm Morningstarshowed Tuesday.

The return marks the best monthly performance for the bondfund since January 2012, according to the Chicago-basedMorningstar. The fund's latest monthly performance also bested98 percent of peers for the month, according to Morningstar.

"The Fed decision to continue to keep their bond-buyingprogram intact contributed favorably," said Todd Rosenbluth,director of mutual fund research at S&P Capital IQ, on thefund's gain. The fund, which is run by Bill Gross, has roughly$251 billion in assets.

The Fed's decision on Sept. 18 to keep its $85 billion inmonthly purchases of Treasuries and agency mortgages unchangedled some investors to buy bonds again after a selloff that beganin May.

The yield on the 10-year U.S. Treasury note plunged 17basis points following the Fed decision. As yields fall, pricesrise.

Gross's fund had 35 percent of its assets in U.S.government-related debt and 36 percent of its assets inmortgages at the end of August, according to firm's website.

Despite the rise in September, Gross's flagship bond fund isstill down 1.9 percent for the year, besting 49 percent ofpeers, according to Morningstar.

The Newport Beach, California-based Pacific InvestmentManagement Co had $1.97 trillion in assets as of June 30,according to the firm's website. The firm is a unit of Europeanfinancial services company Allianz SE.

The Pimco Total Return Exchange-Traded Fund, anactively managed ETF designed to mimic the strategy of theflagship bond fund, also did well and rose 1.7 percent for themonth, making it the top performer in its peer group, accordingto Morningstar data.

Jeffrey Gundlach's DoubleLine Total Return Bond Fund, a competitor to the Pimco Total Return Fund, rose 1.2percent in September, besting 79 percent of peers, according topreliminary Morningstar data.

The fund, which had its biggest-ever monthly outflows of$2.1 billion in Sept., is up 0.3 percent for the year,outperforming the comparable Pimco fund and besting 95 percentof peers, according to Morningstar.

The Los Angles-based DoubleLine Capital LP had $57 billionin assets as of June 30.

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