The bond giant Pimco has removed from its website the quarterly investment reports of two large mutual funds that were managed by William H. Gross before he was forced to leave the firm last year.
Pimco Total Return, the company’s flagship fund, and the Pimco Unconstrained Bond Fund were also the two mutual funds at Pimco that experienced the heaviest investor outflows in 2014: $103 billion from Total Return and $16 billion from the Unconstrained fund, according to Morningstar.
Once well over $200 billion, Pimco Total Return has shrunk to $143 billion as investors have pulled their savings in the wake of last year’s management turmoil.
For most of its funds, Pimco publishes a quarterly investment report that discloses in substantial detail the fund’s holdings in countries, sectors and different types of investment securities.
Outside of the actual spreadsheet that lists every security in the fund portfolio, it is the most detailed document available to investors in terms of understanding what a Pimco fund or manager may be investing in.
Now, the link to the third-quarter investment report for Total Return – once listed with other reports under the fund’s documents section – says that “this content is only available to investment professionals.”
Pimco officials did not respond to several requests for an explanation of the apparent change.
An article on DealBook last month highlighted how Pimco, under Mr. Gross, changed the wording in total return’s prospectus to give the fund the flexibility to exceed its 15 percent emerging market limit.
The article linked to Total Return’s third-quarter investment report and said that hedge funds and outside investors were surprised to see how large Pimco’s emerging market exposure had become:
For example, on the second page of Total Return’s quarterly investment report, Pimco lists its overall exposure as 10 percent. But on Page 16 of the same report, exposure jumps to 23 percent — above its 15 percent prospectus limit.
In an even starker example, Pimco’s $12.9 billion Unconstrained Bond Fund has an overall exposure to emerging markets of 44 percent, although it lists its exposure on the third page of its quarterly report as 13 percent. It considers 30 percent of the overall exposure to be cash equivalent, which include short-term emerging market bonds and assorted derivatives.
For a volatile asset class, these are large allocations, surpassing by a wide margin the 2.5 percent allocation that Morningstar shows as Pimco’s benchmark indexes.