Bill Gross's Bond Fund Took in $2.4 Billion in October

By Min Zeng

The world's biggest bond fund, run by Bill Gross, took in $2.4 billion in new cash in October, boosting the inflow for this year to $14.5 billion.

The data, released by fund tracker Morningstar Inc. on Friday, signals that the $281 billion Pimco Total Return Fund (PTTRX) continues to draw new investments as Mr. Gross's fund has churned out a return that has pulled significantly ahead on the benchmark index.

The fund has handed investors a return of 9.5% in 2012 through Friday, beating the 4% of the Barclays U.S. Aggregate Bond Index, according to data from Morningstar.

Over the past 15 years, the bond fund has returned 7.3%, compared with the 6.1% return on the benchmark.

The Total Return Fund benefited from Mr. Gross's heavy holdings of high-quality U.S. mortgage-backed securities, which account for about half of the fund.

Mr. Gross had bet the Federal Reserve would buy such bonds to support the economy since earlier this year. The Fed did launch a program to buy MBS in September.

The $14.5 billion was a strong rebound from an outflow of $3.1 billion for the first 10 months of 2011 when Mr. Gross was hit by soured bets on a selloff in Treasury bonds.

Still, the inflow was moderate compared to $31 billion for the first 10 months of 2010 and $41 billion between January and October of 2009.

Mr. Gross is founder and co-chief investment officer at Pacific Investment Management Co. Part of Allianz SE (ALV.XE, ALIZF, AZSEY), Pimco is one of the world's biggest asset-management companies, with more than $1.8 trillion in assets under management.

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