Bill Gross Fund Has 4th Consecutive Monthly Outflow

The world's biggest bond fund run by Bill Gross suffered a fourth consecutive monthly outflow in August, a sign how fears over rising interest rates continued to spook investors.

Investors pulled out $7.7 billion cash last month from Mr. Gross's $251.1 billion Total Return Fund at Pacific Investment Management Co., according to data from fund tracker Morningstar on Wednesday.

Clients have yanked $23.3 billion from Mr. Gross's fund in 2013 through July, according to Morningstar. That wiped out $18 billion new cash the fund took in for the whole year of 2012.

The fourth-month redemption was the longest since the period ended March 2011 when the fund suffered five straight monthly outflow, according to data from Morningstar.

Mr. Gross is founder and co-chief investment officer at Pimco. A unit of Germany's Allianz SE (AZSEY), Pimco is one of the world's largest asset management firms by assets.

Anxiety that the Federal Reserve may soon dial back bond buying has sent bond prices tumbling since the start of May and yields sharply higher. Bond prices fall when their yields rise, leaving bond holders vulnerable to capital losses.

Investors have fled bond funds in droves. Last month, investors yanked $38.3 billion from U.S.-listed bond mutual funds and exchange-traded funds through Aug. 27, and since the start of June, over $120 billion cash has fled the sector, according to TrimTabs Investment Research.

Mr. Gross's fund posted a loss of 1.07% in August, compared to a loss of 0.51% on the benchmark Barclays U.S. Aggregate Bond Index, according to Morningstar.

The fund was down 3.86% for 2013 through Tuesday, compared to a loss of 3.2% on the benchmark index, according to Morningstar.

Longer term the fund still outperformed, with an annualized return of 6.54% on average over the past 15 years through Tuesday, beating 5.33% on the benchmark, according to Morningstar.

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