Investors Pull $19.4 Billion From Pimco Fund

By Mike Cherney And Kirsten Grind 

Withdrawals from Pacific Investment Management Co.'s flagship mutual fund jumped sharply again in December, suggesting the giant bond manager is still grappling with the abrupt departure of co-founder Bill Gross.

Investors pulled $19.4 billion from the Pimco Total Return Fund, up from the $9.5 billion yanked in November. However, the new outflows were down from $23.5 billion and $27.5 billion lost in September and October as investors reacted to Mr. Gross's surprise exit to Janus Capital Group Inc. Total assets in the Total Return fund are down to $143.4 billion from $162.8 billion in November.

The December pullback indicates the Newport Beach, Calif., firm is not yet clear of the investor flight triggered by months of internal strife and the departure of its best-known manager at the end of September. Pimco, a unit of German insurer Allianz SE, also lost its former Chief Executive Mohamed El-Erian last year after clashes with Mr. Gross, who managed the Total Return Fund for 27 years.

The jump in December withdrawals came as Total Return's performance slipped. The fund was down 0.48% for the month, worse than the benchmark Barclays U.S. Aggregate index and the average return of other funds in its category, according to fund tracker Morningstar. The return figure includes price changes and interest payments.

For the full year, the Total Return Fund gained 4.69% compared with 5.97% for the Barclays U.S. Aggregate index. Pimco Total Return was ranked 190th in its category, which includes 276 funds that had data for full-year returns, said Russ Kinnel, director of manager research at Morningstar.

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