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Originally published Saturday, September 7, 2013 at 8:04 PM

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Losses, withdrawals batter Pimco Total Return Fund

The bond fund suffered $7.7 billion in net redemptions in August, researcher Morningstar said.

Bloomberg News

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The world’s biggest mutual fund keeps getting smaller.

Bill Gross’ $251 billion Pimco Total Return Fund dropped more than $41 billion, or 14 percent of its assets, in the past four months through losses and investor withdrawals.

The bond fund suffered $7.7 billion in net redemptions in August, Chicago-based researcher Morningstar said.

It was the fourth straight month of withdrawals and the second-highest amount this year.

Top managers from Gross to Jeffrey Gundlach and Dan Fuss have seen their funds shrink after Federal Reserve Chairman Ben Bernanke in May raised the possibility that the central bank would begin to scale back bond purchases.

The Barclays U.S. Aggregate Index, among the most widely used fixed-income benchmarks, declined 3.2 percent this year and fell almost 3 percent since May 22.

The yield on the 10-year U.S. Treasury note rose to 2.9 percent today from 1.93 percent on May 21, the day before Bernanke spoke.

In the past four months, investors redeemed about $26 billion from Pimco Total Return Fund, which became the world’s largest mutual fund in 2009.

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