Pimco, the worlds largest bond-fund manager, continues to bleed assets as investors focus on the firms high profile management turnover, including the fraught departure of CEO Mohamed El-Erian. But outflows from its funds look even worse in comparison to the rebounding flows across the rest of the market, Morningstar data show.

Reuters Bill Gross

The behemoth money manager, run by bond specialist Bill Gross, was the only fund family among the top 10 open-end fund groups by assets to have net outflows in February, according to a Morningstar report released this week. The funds lost a total of $2.49 billion to outflows in February. Over the last year, the fund is one of only two in that top 10 category to have net outflows (the other is American Funds). Pimcos $56.12 billion of withdrawals was by far the most.

Pimco kind of stood out as an outlier, said Morningstar analyst Michael Rawson, who authored the report. More recently bond fund outflows have stabilized but clearly Pimco is being penalized because of manager changes. I dont think its going to last, but short-term people are taking a wait and see approach.

The report focused only on publicly available mutual funds that are domiciled in the U.S. and available for sale. That includes both bonds and equities, but because so much of Pimcos assets are siloed in bonds, the firm didnt have equity funds to rely on to stabilize outflows, Rawson said. Given that, Pimcos market share dropped from about 6% to 4.7% over the past year.

Morningstar

Even as bond fund flows have stabilized in the broader market, Pimco has been a laggard. The noncore set of bond funds that pride themselves on market-beating returns because they often arent constrained by specific investing mandates has taken in a lot of money this year as investors look to circumvent losses due to rising interest rates. The Pimco Unconstrained Bond Fund /quotes/zigman/520466/realtime /quotes/nls/pubrx PUBRX had been a darling of this alternative fund class until the middle of 2013, when a series of missteps cut into its performance and led to outflows, said Rawson (see chart).

Gross took over management of the fund in December, when Pimco said former manager Chris Dialynas was going on sabbatical. Nonetheless investors continued to move their money out of that fund and into other nontraditional funds like Goldman Sachs Strategic Income Fund  /quotes/zigman/602925/realtime GSZAX. BlackRock Strategic Income Opportunities Portfolio /quotes/zigman/500339/realtime BASIX. and JPMorgan Strategic Income Opportunities Fund /quotes/zigman/527214/realtime /quotes/nls/jsoax JSOAX. which have soaked up new money in this market environment.

Ben Eisen

Follow Ben Eisen @beneisen .

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