Last year was tough for PIMCO’s co-chief investment officer Bill Gross. He thought that U.S. Treasuries were ripe for a plunge because the Federal Reserve planned to end its $600 billion QE2 bond-buying. Without this support, what would hold up bond prices?
Well, Gross did not realize that the global economy would shudder and that investors would keep aggressively moving into U.S. Treasuries as a safe haven. The result was that the PIMCO Total Return Fund (MUTF:PTTAX) posted a meager 3.74% in 2011.
So was this a sign that Gross has lost his mojo and maybe should think about retirement? Perhaps not. Consider that the Total Return Fund attracted $835 million in inflows during February. This compared to $3 billion in redemptions for the fourth quarter.
Then again, Bill has been generating some nice returns lately. Already this year, the Total Return Fund is up 2.8%, which is better than 95% of its peers. And it certainly helps that Bill has been piling on the trade for U.S. Treasuries. In addition, just yesterday, Pimco launched its ETF version of the Total Return Fund.