PIMCO’S Total Return fund bled $1.9 bln in November

NEW YORK, Dec 9 (BestGrowthStock)- Bill Gross’s PIMCO Total Return
Fund, the world largest bond fund and the Newport Beach,
Calif.’s flagship portfolio, saw investors pull some $1.9
billion in November, the most in two years, according to
mutual-fund tracker Morningstar.

The Total Return fund, which manages $256 billion, lost 1.5
percent in November, its worst month since September 2008,
Morningstar added. Mark Porterfield, spokesman for PIMCO,
declined to comment.

Treasuries have come under severe selling pressure on signs
the U.S. economic recovery is strengthening and the outflow
that began last month could result in further reallocation into
other riskier securities including stocks.

Rates climbed on Friday, with the benchmark 10-year
Treasury note (US10YT=RR: ) trading a point lower in price to
yield 3.33 percent, up from 3.21 percent late Thursday, marking
the biggest rise in yields for a week since August 2009.

Like other bond fund managers, PIMCO has attracted
monstrous net inflows in the wake of the global financial
crisis as investors have poured money into safer fixed-income
investments. PIMCO altogether oversees more than $1.1
trillion.

While November’s outflow for PIMCO was de minimis,
investors could move more money out of bonds and into stocks
with signs of improving fundamentals in the United States.

Many economists this week raised their U.S. gross domestic
product forecasts after President Barack Obama on Monday
unveiled a compromise deal to extend all Bush-era tax cuts for
two years.

Before the tax-cut compromise, investment bank Goldman
Sachs (GS.N: ) raised its 2011 U.S. gross domestic product
forecast to 2.7 percent from 2 percent. On Tuesday, Goldman
said the tax package could add 0.5 to 1.0 percentage points of
growth on top of that.

Even PIMCO revised its growth forecast for the United
States next year in the wake of tax-cut plan but warned the
growth impact to be short-lived, chief executive Mohamed
El-Erian told Reuters late Thursday.

PIMCO sees the economy growing 3 percent to 3.5 percent in
the fourth quarter of 2011 from the same period of this year.
That compares with its previous estimate for 2 percent to 2.5
percent growth.

“It is far from certain at this point that 2011’s higher
growth projection will translate into a significant improvement
in the growth outlook for the period beyond next year,” he
added.

(Reporting by Jennifer Ablan; Editing by Diane Craft)

PIMCO’S Total Return fund bled $1.9 bln in November