It's tough at the top.
Bill Gross’s Pimco Total Return Fund, the world’s largest mutual fund, absorbed a record $9.9bn in net redemptions last month as investors fled bonds in anticipation of the Federal Reserve scaling back its purchases.
Bloomberg News reports that Pacific Investment Management Co., the Newport Beach, California-based firm that runs the fund, provided the preliminary estimate to Morningstar, the Chicago-based research firm said in an e-mailed statement.
The withdrawals left the fund with $268bn in assets at the end of June, Morningstar said.
'Money really came out of core bond funds in June', Michael Rawson, an analyst with Morningstar said in a telephone interview. 'The market reacted to the Fed'.
The withdrawals show the vulnerability of Pimco and other fund managers with a heavy weighting in bonds to a sustained decline in fixed-income markets. More than 90% of Pimco’s $2.04 trillion in assets as of March 31 were in bonds.
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