“The market basically has misinterpreted the growth and unemployment targets while leaving out inflation targets going forward,” he said in an interview on June 19 with Trish Regan and Adam Johnson following Bernanke’s comments.
Gross’s Total Return fund generated annual gains of 7.1 percent over the past five years, outpacing 91 percent of peers, data compiled by Bloomberg show.
Bond funds worldwide have experienced withdrawals this month after Bernanke told Congress on May 22 that the central bank’s policy-setting board could start reducing its bond purchases in “its next few meetings” if the U.S. employment outlook shows sustained improvement.
U.S.-listed bond mutual funds and exchange-traded funds saw record monthly redemptions of $61.7 billion through June 24. The redemptions surpassed the previous monthly record of $41.8 billion, set in October 2008, according to an e-mailed statement by TrimTabs Investment Research in Sausalito, California. Investors withdrew $52.8 billion from bond mutual funds and $8.9 billion from ETFs during the period, said Richard Stern, a spokesman for TrimTabs.
Inflection Point
Gross’s fund saw an estimated $1.32 billion leave in May, according to Chicago-based Morningstar Inc., its first withdrawals since 2011. The $4.7 billion Pimco Total Return Exchange-Traded Fund has seen redemptions of $487 million since May 15, according to data from San Francisco-based IndexUniverse.
The total return category includes funds that invest in intermediate-term, investment-grade bonds -- core holdings for investors seeking to put money into fixed income -- and excludes municipal bond funds.
Gross cut the holdings of Treasuries in the Pimco Total Return Fund to 37 percent in May from 39 percent in April, a level that was the highest since July 2010, according to data on Pimco’s website.
In the latest commentary, Gross advised investors “don’t jump ship now.”
“We may have reached an inflection point of low Treasury, mortgage and corporate yields in late April, but this is overdone,” he wrote.