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How to Lose a Billion Dollars

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That’s what’s happening over at Pimco as money continues to exit the bond fund managed by Bill Gross.

The Pimco Total Return Fund, the world’s biggest bond fund, is on track to end the first quarter trailing 87% of its peers, the latest setback for high-profile portfolio managerBill Gross.

The $236.5 billion fund posted a year-to-date total return of 1.28% through Thursday, according to data from fund tracker Morningstar Inc. MORN -0.78% The benchmarkBarclays BARC.LN +0.32% U.S. Aggregate Bond Index, which serves as a gauge for a wide variety of bonds but is dominated by highly rated debt, returned 2.03%. That is also the average return for the 278 bond funds Morningstar places in the same category as Pimco Total Return Fund, which has been managed by Mr. Gross since its creation in 1987. Total return includes price appreciation and interest payments.

Investors are closely watching the performance of Pacific Investment Management Co.’s flagship fund after it posted a negative return of 1.92% in 2013, its biggest loss since 1994. A subsequent management shake-up in January resulted in the departure of Chief Executive Mohamed El-Erian . Clients have yanked money from the fund for 10 consecutive months through February, according to Morningstar.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.

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