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Investors continue retreat from Pimco's flagship Total Return Fund

Investors continue retreat from Pimco's flagship Total Return Fund
PIMCO offices in Newport Beach. The asset manager said its flagship Total Return Fund saw withdrawals of $8.6 billion in February, the slowest pace since the departure of its star fund manager, Bill Gross, in September (Mark Boster / Los Angeles Times)

Pacific Investment Management Co. said investors pulled $8.6 billion from its flagship Total Return Fund in February, a sign the Newport Beach fund manager is still grappling with the fallout from the September departure of its onetime star manager, Bill Gross.

Although February's withdrawals are within Wall Street expectations, the figure is considered significant, representing 6% of Total Return's assets at the end of January. The fund, which Gross helped to steer to global prominence over four decades, is well less than half its peak size of about $293 billion in April 2013.

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The fund had $124.7 billion in assets at the end of last month.

The pace of withdrawals may be slowing. Outflows spiked to nearly $18 billion in September and $32 billion in October, according to Morningstar Inc., in the frenzied days following Gross' abrupt resignation amid pressure from Pimco executives. He moved to rival Janus Capital Group a few days later.

The fund saw outflows of $12.5 billion in January, according to Morningstar, which uses a slightly different method from Pimco to calculate assets under management.

The outflows came as Total Return posted a 1.9% return for February, beating its benchmark by 0.76%. Pimco said that in the last five months, roughly corresponding to Gross' departure, it has returned 3.25%, outperforming its benchmark by 0.3%.

Twitter: @deanstarkman

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