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Pimco Total Return Fund ETF posts $53.9 million net outflow in May

Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), speaks at the Morningstar Investment Conference in Chicago, Illinois, June 19, 2014. REUTERS/Jim Young

By Jennifer Ablan

NEW YORK (Reuters) - The Pimco Total Return Active Exchange-Traded Fund posted net outflows of $53.9 million in May, ending the month with $2.6 billion in assets under management, according to Morningstar data on Tuesday.

The Pimco Total Return ETF, an actively managed ETF intended to mimic the strategy of the company's flagship mutual fund, hit its peak in assets under management in April 2013 with $5.2 billion, Morningstar said.

Pacific Investment Management Co, a unit of Germany's Allianz SE, had assets under management of $1.59 trillion as of March 31. It saw nearly $550 million in outflows in the two days following news of the departure on Sept. 26 of longtime manager Bill Gross.

Last month's cash withdrawals were the first monthly outflows of the year, Morningstar said, noting that year-to-date the Pimco Total Return Active ETF had $253 million of inflows collectively.

SPDR DoubleLine Total Return Tactical ETF, co-managed by widely followed investor Jeffrey Gundlach, had net inflows of about $182 million in May, bringing its assets under management to $599 million. The day-to-day management of the SPDR DoubleLine Total Return Tactical ETF, which started with $112.5 million in assets on Feb. 23, is led by Gundlach, Philip Barach and Jeffrey Sherman.

On a year-to-date basis, the Pimco ETF has outperformed 87 percent of its peer category, with returns of 1.60 percent, Morningstar said as of Monday. But on a one-month and three-month basis, the ETF has struggled: For the one-month return as of June 1, the portfolio was down 0.33 percent, trailing 65 percent of its peer category. On a three-month basis ending June 1, the Pimco ETF was down 0.84 percent, lagging 88 percent of its peer category, according to Morningstar.

"Unlike mutual fund investors that tend to be more patient and long-term focused, those in the Pimco Total Return ETF that can trade intraday may have shorter time horizons," said Todd Rosenbluth, director of ETF & Mutual Fund Research at S&P Capital IQ. "As an active ETF lags its peers, investors question whether the higher expense ratio is warranted. The recent underperformance likely played a role."

Pimco declined to comment for this story.

(Reporting By Jennifer Ablan; Editing by Chizu Nomiyama, David Gregorio and Steve Orlofsky)