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PIMCO Total Return ETF Upped Treasury Bets in June Amid Outflows


PIMCO Total Return ETF (BOND) experienced outflows of more than $500 million in June as the exchange traded fund managed by Bill Gross suffered its worst month of performance since listing in early 2012.

The ETF boosted its stake in U.S. government-related debt to 35% at the end of June from 31% at the end of May. The category includes Treasuries, inflation-indexed bonds and other securities.

BOND is the ETF version of PIMCO Total Return Fund, the world’s largest mutual fund.

Since its 2012 launch, BOND has trounced broad bond ETFs such as iShares Core Total U.S. Bond Market ETF (AGG). However, that performance edge has slipped since early May when Treasury yields began their swift move higher.

“PIMCO has been in the spotlight because of its large exposure in Treasuries and Treasury-related securities, which have been under severe selling pressure this year. Gross has even sought to reassure his investors, touting PIMCO’s 40-year performance history,” Reuters reports.

BOND lost about 2.2% in June, according to the report.

The fund saw net outflows of about $555 million last month, according to IndexUniverse data. BOND is the largest actively managed ETFs with assets of $4.3 billion.

During the first half of the year, PIMCO Total Return Fund has been hurt by bets on Treasury Inflation Protected Securities, Bloomberg reports. [Rising Rates and Low Inflation a Toxic Mix For TIPS ETFs]

The chart below shows the relative performance of BOND versus iShares Core Total U.S. Bond Market ETF (AGG), which tracks the Barclays Aggregate Bond Index.

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