Gross miscalculation?

December 16, 2011

By Jennifer Ablan and Matthew Goldstein

It appears that Bill Gross’s PIMCO Total Return Fund is losing ground with investors — just not as fast as we originally thought.

Morningstar, the mutual-fund tracker, initially told us that PIMCO’s flagship fund had suffered $17 billion in net outflows over the last 12 months. It turns out Morningstar discovered this morning that it miscalculated and the figure actually is $10.3 billion.

That’s slightly better news for Gross but the trend still holds that the fund is seeingĀ  a steady stream of outflows. Morningstar estimates that in October and November of this year, PIMCO Total Return fund has seen $1.69 billion in customer redemptions.

And since November 2010, total outflows from the fund have been $12.3 billion. November 2010 was a critical month for Gross, also known as “the Bond King,” because it was the first time his fund had suffered outflows in about two years.

Morningstar also reports that over the past 13 months, the Total Return fund has seen outflows in 8 of those months. Last December, it was a particularly brutal month for Gross. Roughly $6.7 billion was withdrawn from the fund. And given this year’s poor performance, there is a strong chance this December’s outflow could be hefty too.

With the December numbers still not in, it could be a very nervous holiday season in Newport Beach, California.



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