Bill Gross Bond Fund Saw $5.4 Billion Sept. Outflow

The world's biggest bond fund run by high-profile fund manager Bill Gross saw clients cash out $5.4 billion in September, the fifth consecutive monthly redemption.

The data, released by fund tracker Morningstar on Wednesday, brought the total net redemption this year from the $250 billion Total Return Fund at Pacific Investment Management Co. to $28.7 billion. The amount represents 10% from the fund's total assets at the end of 2012, according to Morningstar.

This year's outflow already eclipsed the $18 billion the fund attracted for the whole year of 2012, according to Morningstar.

Still, the pace of redemption last month eased from a $7.7 billion outflow in August, as the bond market stabilized from a summer selloff.

The Federal Reserve refrained last month from cutting its $85 billion monthly bond buying program, a move that broke the tide of rising bond yields since the start of May. Bond prices rise when their yields fall.

Mr. Gross's fund's return got a lift last month from the Fed policy. It handed investors a total return of 1.77% in September, outpacing the 0.95% gain from the benchmark Barclays US Aggregate Bond Index, according to Morningstar.

The fund still lost ground this year, down 1.97% in 2013 as of Tuesday, compared to 1.99% loss from the benchmark index, according to Morningstar. The fund was stung by a record quarterly loss of 3.6% during the April-June period when bond yields rose sharply.

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