By Jennifer Ablan
NEW YORK (Reuters) – Investors poured $1.2 billion into the Pimco Income Fund, overseen by group chief investment officer Dan Ivascyn, in September, bringing total assets under management to $66 billion for the portfolio, according to Morningstar data on Thursday.
The Pimco Income Fund, widely seen by investors and analysts as Pimco’s new flagship fund, has brought in a total of $10.5 billion for the year through September, Morningstar added.
“In this low-yield environment, people are looking for income-oriented alternatives,” Ivascyn said in a telephone interview.
The Pimco Total Return Fund, once the world’s largest bond fund, saw another month of cash withdrawals.
In September, Total Return posted cash outflows of $1.7 billion, bringing its year-to-date outflows to $9.6 billion, according to Morningstar.
Pimco Total Return, which hit a peak of $292.9 billion in assets under management in April 2013, now has assets under management of $84 billion.
“The performance has been solid,” Ivascyn said about Pimco Total Return Fund. “I think core strategies such as Total Return has been a little less in favor. But Total Return had a good month of performance and I believe flows will follow good performance.”
For the one-month ended Sept. 30, Total Return posted returns of 0.37 percent, surpassing 95 percent of its peer category, according to Morningstar data. But in the first nine months of the year, Pimco Total Return has been trailing its peers, posting returns of 5.18 percent, lagging behind 76 percent of its category, Morningstar said.
“Pimco Total Return has lagged its Lipper peer group in 2016 while the firm’s Income fund has outperformed,” said Todd Rosenbluth, director of ETF and mutual fund research for CFRA. “Though they have different approaches, investors will shift assets to the active strategies that are working. Until Total Return can establish a stronger record, investors will look elsewhere.”
Like BlackRock Inc and Janus Capital Group Inc, Pimco adds dividend reinvestments into its inflow figures. Research organizations such as Morningstar and the Investment Company Institute, along with many fund managers, including Vanguard, Fidelity and DoubleLine, exclude reinvestments and treat only fund share purchases as inflows.
Pimco, a unit of German insurer Allianz SE, is headquartered in Newport Beach, California, with more than $1.5 trillion in assets under management.
(Reporting by Jennifer Ablan; Editing by Meredith Mazzilli and Lisa Shumaker)