Sept. 30 (Bloomberg) -- Withdrawals from a Pacific Investment Management Co. exchange-traded fund that was run by Bill Gross slowed yesterday after record redemptions the day the star trader left.
Investors pulled about $98 million from the Pimco Total Return ETF, according to data available on Pimco’s website that shows adjusted shares outstanding. That followed a record $446.5 million withdrawal on Sept. 26 as Gross announced his sudden departure from the firm he co-founded to join Janus Capital Group Inc.
The $3 billion ETF, which follows a similar investment strategy as Newport Beach, California-based Pimco’s flagship $222 billion mutual fund, has lost 0.2 percent since Sept. 25. Gross had overseen the fund since its March 2012 inception.
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Pimco’s Chief Executive Officer Douglas Hodge said yesterday that the money manager, which oversees about $2 trillion, is ready for redemptions. Pimco’s Total Return mutual fund may see withdrawals of as much as $150 billion, or about two-thirds of its assets, according to a report by Atanasio Pantarrotas, an analyst at Paris-based broker Kepler Cheuvreux. Competitors at DoubleLine Capital LP, Bank of New York Mellon Corp.’s Standish unit and Western Asset Management Co. said they’ve already started seeing inflows.
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A BlackRock Inc. fund with a similar strategy has also benefited with the iShares Core U.S. Aggregate Bond ETF adding $403.6 million in deposits.
The redemptions from Pimco’s ETF during the past two trading sessions accounted for 15 percent of the fund’s shares outstanding, data compiled by Bloomberg show.
Mark Porterfield, a spokesman for Pimco, declined to comment.
Traders said Pimco has been selling securities from the ETF. The firm asked dealers to seek bids on Sept. 26 on more than $170 million of commercial-mortgage securities guaranteed by government-backed Fannie Mae, according to two people with knowledge of the matter, who asked not to be identified because the trading isn’t public.
Those securities were among the largest holdings of that type in Pimco’s Total Return exchange-traded fund, according to data compiled by Empirasign Strategies LLC and Bloomberg. Banks were also circulating a list of $77 million such bonds for sale yesterday that matched the fund’s remaining holdings, the data show.
Pimco also sold C$225 million ($201.3 million) of bonds issued by Ontario, according to data on the manager’s website. It was the fund’s largest holding as of Sept. 25.
--With assistance from Sarah Mulholland and Mary Childs in New York.
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