Since Bill Gross
] in September, billions of dollars have flowed out of his old flagship fund, the Pimco Total Return Fund
. Given that much of the fund's assets came from 401(k) platforms, many of the outflows are coming from such plans. But where are those funds headed?
Jessica Toonkel of Reuters reports
many 401(k) plan advisors (KPAs) and the retirement plan sponsors they advise are trying to diversify their bond fund PM exposure, either by splitting their bond fund dollars between multiple funds or by favoring bond funds that are PMed by teams. Team-managed funds that are winning some of those dollars, Reuters
reports, include: the Baird Core Plus Bond Fund
], the Delaware Diversified Income Fund
], the Dodge & Cox Income Fund
], the Loomis Sayles Bond Fund
], and the Prudential Global Total Return Fund
also cites Jeff Gundlach's DoubleLine
] as a big winner of Pimco outflows. Gundlach just hired a 401(k) veteran to lead DoubleLine's sales efforts in the channel (called defined contribution investment-only, "DC I-O", by 401(k) industry insiders.)
also notes that Pimco Total Return has beaten 93 percent of its peers since Gross left. The fund is now team PMed, by Mark Kiesel
, Scott Mather
, and Mihir Worah
The wire service points to several folks moving 401(k) dollars, including: Mendel Melzer
, chief investment officer for recordkeeping third-party administrator Newport Group
(based in Heathrow, Florida, near Orlando); Ronnie Cox
, director of investments and technology at KPA network Pensionmark Retirement Group
(based in Santa Barbara, California, but with affiliates all across the country); and Brian Ward
, a Wells Fargo
-affiliated advisor (based in Brentwood, Tennessee, near Nashville).
In the four months since Gross' big move, no KPA has told MFWire
that they were sticking with Pimco Total Return (though perhaps some were doing so and just keeping quiet). A key factor in the switching process is the 401(k) recordkeeping platforms; especially for smaller plans, only certain funds are available on each platform. So some KPAs found themselves picking multiple replacements for Pimco Total Return, for plan sponsors on different platforms. This makes it harder for the Pimco 401(k) outflows to concentrate in any one bond fund. So if you're wondering why you're not getting a bigger chunk, check on your 401(k) platform availability.
piece ends with a note of warning for other fundsters selling wares powered by star PMs. Cox of Pensionmark says that the network is reviewing other, non-beleaguered star-powered funds, like Fidelity's
and New Insights Fund
, and T. Rowe Price's Equity Income
and Capital Appreciation
funds. 401(k)s suddenly don't look so safe for star-powered funds, a message
by the folks at Russell Investments
"We would rather be safe than sorry," Cox tells the wire service.
Neil Anderson, Managing Editor
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