Pacific Investment Management Co.’s Income Fund brought in $2.7 billion from investors in July, making the bond giant the most popular U.S. active manager last month, according to data from fund tracker Morningstar.
Overall, the firm had $2.5 billion in net flows in July, meaning the Income Fund even made up for some of the firm’s outflows.
The $92 billion PIMCO Income Fund, managed by a team that includes chief investment officer Dan Ivascyn, has been a top performer of late. In 2016, the fund returned 8.29 percent — 5.64 percentage points more than its benchmark, the Bloomberg Barclays U.S. Aggregate Bond index, and 0.77 percentage points more than peers in its multi-sector bond fund category. Year-to-date in 2017, the fund has delivered a 5.62 percent return versus the benchmark’s 2.71 percent return.
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For performance over the past five years, the PIMCO Income Fund ranks No. 3 in its category, according to Morningstar. A PIMCO spokeswoman says the firm doesn’t provide details about fund flows.
Earlier this year, the PIMCO Income fund became larger than the PIMCO Total Return Fund, which has been losing assets since co-founder Bill Gross left the firm in September 2014 for Janus Capital, now Janus Henderson, after months of controversy and battles with fellow executives. PIMCO Total Return now has $73.3 billion, almost $20 billion less than the Income Fund.
As for worries about whether the fund is becoming too large, experts say it is helped by a global multi-sector mandate, which allows managers to invest in a wide variety of asset classes and regions of the world.
PIMCO’s inflows come at a time when active managers continue to experience few victories. Last month, investors socked away $10.8 billion into U.S. equity index funds and pulled $19.6 billion out of U.S. active equity funds, per Morningstar.
Taxable bond funds like PIMCO’s Income Fund have also been hit by the passive trend, but not as dramatically. With many investors concerned about stock market valuations, the taxable bond category was one of the most popular, bringing in $34.7 billion overall in July, according to Morningstar.
The majority of flows into taxable bond funds still went to index funds, but active funds gained a respectable $13.6 billion in July. The second-most-popular active fund shop behind PIMCO was Vanguard, which is best known for its passive funds and has been a major beneficiary of the shift from active to passive. Vanguard, which brought $1.5 billion into its actively managed funds last month, also had the highest net flows into passive funds in July, taking in $20.1 billion.
