Investors Bailing on Big Bond Funds
Management issues, poor performance and redemptions from its flagship fund have been headline headaches for Pacific Investment Management Co. Investors pulled $47.8 billion, or 16.5% of assets, from its huge Total Return Fund in the 12 months through February, according to Morningstar.</br></br>Relative to assets, though, redemptions at some of Pimco's peers have been. Investors pulled $8.03 billion, or 20.5% of assets, from DoubleLine Total Return Bond Fund in the period; $6.07 billion, or 20.7% of assets, from J.P. Morgan Core Bond; and $6.06 billion, or 18.3% of assets, from American Funds Bond Fund of America, says Morningstar.</br></br>(DoubleLine Capital says Morningstar's figures are slightly off, and that redemptions for its fund were actually $7.62 billion.)</br></br>The redemptions were partly the result of the convulsion in the financial markets last summer as investors began to fear that the Federal Reserve would begin to reduce its monthly bond purchases and perhaps move to boost interest rates, which is bad for bond prices.</br></br>Daisy Maxey WSJ.com