Preliminary Morningstar data showed that the Pimco Total Return Fund only outperformed 29% of its peers last month. This year so far, the fund has recorded returns of 1.877%, putting it 76% behind other similar funds, Reuters reported.
Even if Bill Gross's Pimco Total Return started gaining again after a challenging ride last year, it still lagged behind 71% of its rivals in February, according to Morningstar. The fund, which has assets of $237 billion, rebounded with a 0.517% rise last month after posting a 1.92% annual loss in 2013. The Barclays US Aggregate Bond Index, meanwhile, earned 0.53% in February, the report said.
The report, however, quoted Morningstar Research Analyst Eric Jacobson Eric Jacobson who warned, "Focusing on two months of weak relative returns for any fund, especially when the margin of difference between a fund and its category average is a barely perceptible 16 basis points, is making a mountain out of a molehill."
Pimco manages assets of $1.91 trillion. Focus is now placed on who will lead the company after Chief Executive Officer and Co-Chief Investment Officer Mohamed El-Erian said in January that he would be leaving his post. Since El-Erian made his announcement, Gross has taken steps to assure investors by putting a new leadership structure in place composed of six new deputy chief investment officers. Gross said that compared to the previous structure when calls regarding investment strategy rested only on his and El-Erian's shoulders, putting six new deputy chief investment officers in place was a "significant improvement."
Pimco's six-man deputy chief investment officers are composed of Dan Ivascyn, Andrew Balls, Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah. El-Erian is slated to leave his post later this month, the report said.
A Pimco spokesman said, "Pimco believes that fixed income should be a key part of any diversified portfolio, whether it be institutional or retail, and we still see plenty of opportunities in the global market for bonds for the patient investor."
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