In business, much like in life, nothing lasts forever.
Take the case of Pimco’s Total Return fund, which lost its crown as the world’s biggest bond fund to Vanguard’s Total Bond Market Index Fund due to unabated withdrawals from its clients.
But things are looking up lately.
According to The Wall Street Journal, the amount of money that was withdrawn from Pimco’s flagship fund dropped to its lowest level since Bill Gross’ departure last September, a sign that the firm is stabilizing. Another sign of an upswing: “The Teachers’ Retirement System of the State of Illinois, a client of Pimco’s since 1982, removed Pimco from its “watch list” in May as it became more comfortable with the portfolio-management team Pimco put in place before Mr. Gross’s departure.”
Last month, investors withdrew around $3 billion from Total Return, which invests in Treasurys and corporate bonds, the report said. It was the fifth straight month that withdrawals have declined, it said. The month after Gross left, investors pulled $27.5 billion from the fund, a record.
Investors have a reason to stay. So far this year through May, the fund returned 1.23%, including expenses, beating 61% of similar funds, according to WSJ.
Photo credit: 401(K) 2012 via Flickr