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New PIMCO CEO faces obstacles to regaining share

Todd Rosenbluth is directorof exchange-traded fund and mutual fund research at S&P Global MarketIntelligence. The S&P Global Market Intelligence rankings for ETFs andmutual funds, available through MarketScope Advisor, are quantitatively derivedand based on performance, risks, costs and a qualitative analysis of theunderlying holdings.

PacificInvestment Management Co. LLC experienced $13.70 billion worth ofredemptions in its long-term mutual funds during the first half of the year,even as the broader mutual fund industry pulled in $27.03 billion of new money.

PIMCOrecently announcedthat Man Group PlcCEO Emmanuel Roman will step into its top role Nov. 1. He will replace DouglasHodge, who will assume a new role as managing director and senior adviser.

Roman'spriorities likely will include focusing on stabilizing the PIMCO's asset basein the many of its long-term products. But his efforts will also need to offsetincreased competition from exchange traded funds that have been in 2016.

Whilethe pace of PIMCO's mutual fund outflows slowed from 2015 under Hodge, when thecompany shed $99.9 billion of assets according to Thomson Reuters Lipper data,investors continue to pull money out of many of the asset manager's products.PIMCO Total Return, still the company's largest portfolio in June with $86.40billion in assets, had net $6.66 billion in net outflows.

TheTotal Return offering's $850.7 million in June redemptions pushed theconsecutive streak to 37 months, dating back to before former fund manager BillGross departed forJanus Capital GroupInc. The fund's institutional share class, PTTRX, rose 3.93% in thefirst half of 2016, lagging its Lipper peer group and the Barclays U.S.Aggregate index.

However,not all of the company's first-half outflows occurred at bond funds previouslymanaged by Gross. For example, PIMCO Real Return Asset Fund and PIMCO EmergingLocal Bond have long been managed by Mihir Worah and Michael Gomez,respectively. The funds combined had $2.65 billion in redemptions.

Whilethere have been some bright spots, such as the PIMCO Income Fund, the company's$4.18 billion in first-half bond fund outflows occurred even as diversifiedasset management peers Vanguard Group, Prudential Investments and Lord Abbett& Co. pulled in $40.27 billion, $4.86 billion and $2.79 billion,respectively.

Meanwhile,more bond fund focused peers DoubleLine Capital and Metropolitan West AssetManagement gathered $9.32 billion and $5.77 billion of new money.

Inaddition, the company lost $8.79 billion of assets in its alternativesproducts, led by PIMCO All Asset Fund, which had $3.33 billion in first-halfoutflows.