Pimco Feels the Pain of Its Fourth Big Equity Push
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Monday, January 09, 2017

Pimco Feels the Pain of Its Fourth Big Equity Push

Stock funds are again a sore point for Pimco [profile], though this time the pain is coming from passively managed stock funds.

Emmanuel Roman
AUM in the Research Affiliates-powered Pimco smart beta equity funds, the Pimco RAE Funds, has fallen from $30 billion at the end of Q3 2014 to $14.2 billion on January 6, 2017, Julie Segal of Institutional Investor reports. Citing M* data, the trade publication notes that the Pimco RAE Funds suffered $3.5 billion in net outflows in the first 11 months of 2016 and $8.1 billion in net outflows in 2015.

Pimco and Research Affiliates have teamed up for years, but Pimco doubled down on the alliance in 2015 after the departure of the latest Pimco equities chief, Virginie Maisonneuve. Maisonneuve's departure marked the end of Pimco's third big equity fund push, so the focus on the Research Affiliates products was the fourth. (Push one was back in 1980s, push two was in 1999, and push three began in 2009.)

Yet there may be a light at the end of the outflows tunnel. II notes that for the $1.8-billion Pimco RAE Fundamental PLUS Fund, the biggest product of the alliance, outflows in November 2016 slipped to a mere $9 million as the fund's performance in 2016 rebounded. Perhaps the smart beta worm is turning back in Pimco's favor.

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