Pimco's Total Return Fund loses USD 41 billion in four months- Morningstar

September 7
12:18 PM 2013

According to investment research firm Morningstar, Pimco's Total Return Fund experienced losses and withdrawals totaling USD 41 billion in the last four months. Pimco's Total Return Fund is the largest mutual fund in the world.

The fund took the hit as investors await the tapering of the Federal Reserve's stimulus package. Since May, the value of the fund had declined by 14%. From USD 292 billion, the Total Return Fund is now worth USD 251 billion. It was in May when Federal Reserve Chairman Ben Bernanke told Congress that it would begin reducing its monthly asset purchases worth USD 85 billion. The speculation that the Federal Reserve would start tightening its policies caused broad bond indexes to drop this year.

"Bond King" Bill Gross established Pimco's Total Return Fund in 1987. It had given reliable performance in the past ten years. The fund had given returns of 75% more than its counterparts. For 2013, however, 87% of other mutual funds gave better yields.

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