Pimco Total Return posts $3.5 billion outflow in January: Morningstar

By Sam Forgione

NEW YORK (Reuters) - Investors pulled $3.5 billion from Pimco's Total Return Fund in January, Morningstar data showed on Tuesday, the ninth straight month of outflows from the world's biggest bond fund which is run by Bill Gross.

Last year, the fund saw record outflows after its weak performance, with investors withdrawing $41.1 billion. However, its size remained roughly unchanged at $237 billion after the outflows in January, due to its positive monthly performance.

"Investors, I think, are still looking at the 2013 poor performance and reacting to it," said Todd Rosenbluth, director of mutual fund research at S&P Capital IQ.

The Pimco Total Return Exchange-Traded Fund, an actively managed ETF designed to mimic the strategy of the flagship mutual fund, posted outflows of $32 million in January, marking the ninth straight month of outflows from the ETF.

The ETF posted net outflows of $197 million last year. The latest outflows also left the ETF's size unchanged at around $3.5 billion.

Pacific Investment Management Co. (PIMCO), with $1.92 trillion in assets as of December 31 according to the firm's website, is one of the most closely-watched bond firms and influences other investors in the marketplace.

It has come under closer scrutiny in recent weeks after it said last month that Mohamed El-Erian, its chief executive and co-chief investment officer, would leave the company in mid-March, leaving Gross as the sole chief investment officer.

Pimco had $6.9 billion in outflows across the firm's U.S. open-end mutual funds in January, extending last year's record net outflows of $31.1 billion and marking the eighth straight month of withdrawals from the funds.

Gross's fund rose 1.35 percent in January according to preliminary Morningstar data, recovering from an annual loss of 1.92 percent in 2013, its worst annual loss since 1994.

The fund, which was hit by a plunge in bond prices last year on fears of a pullback in the Federal Reserve's bond-buying stimulus, benefited from rising Treasuries prices in January, but still lagged more than half its peers.

Newport Beach, California-based Pimco is a unit of European financial services company Allianz SE.

(Reporting by Sam Forgione; Editing by Jennifer Ablan and XXXX)