Morningstar announced Oct. 13 that its analysts have changed the ratings of five PIMCO funds, upgrading one and downgrading four, including the PIMCO Total Return fund.
On Sept. 26, Morningstar placed all 39 analyst-rated PIMCO funds under review following the departure of Bill Gross. As of Oct. 10, Morningstar analysts had reaffirmed, upgraded or downgraded their ratings for 10 PIMCO funds.
As of Oct. 10, Morningstar reaffirmed Analyst Ratings for five PIMCO funds, upgraded the PIMCO Municipal Bond fund from Neutral to Bronze and downgraded four PIMCO funds:
- PIMCO Corporate & Income Opportunities, downgraded to Neutral from Bronze
- PIMCO Emerging Local Bond, downgraded to Silver from Gold
- PIMCO Emerging Markets Bond A, downgraded to Silver from Gold
- PIMCO Total Return, downgraded to Bronze from Gold
Morningstar changed Analyst Ratings for three other U.S. mutual funds in September: Franklin Flex Cap Growth (downgraded to Neutral from Bronze), Invesco International Growth (upgraded to Silver from Bronze) and TFS Market Neutral (downgraded to Silver from Gold). A summary of the most recent Analyst Rating changes for U.S. mutual funds is available here (free registration required).
Asset Flow Report
Morningstar also reported estimated U.S. mutual fund and ETF asset flows for September 2014:
- Long-term mutual funds and ETFs attracted $9.0 billion of new investor cash during the month.
- Active taxable-bond funds registered their most significant monthly outflow since June 2013, $18.7 billion, spurred by the Sept. 26, 2014 announcement of Bill Gross' departure from PIMCO. Outflows from PIMCO Total Return aside, taxable-bond funds have otherwise seen relatively consistent inflows year to date.
- Active and passive U.S. equity fund flows continued to move in opposite directions — active U.S. equity funds saw outflows for the seventh consecutive month, and passive U.S. equity funds collected inflows for the eighth consecutive month.
- Among passive funds, all categories except commodities funds saw inflows in September, most notably U.S. and international-equity offerings. Total passive flows were larger than total active flows for the seventh straight month.
- The three active funds with the heaviest outflows during the month were PIMCO funds formerly managed by Bill Gross, which lost a little more than $23.3 billion. Two intermediate-term bond funds that appeared to be reaping the benefits of investors seeking alternatives to PIMCO include Metropolitan West Total Return Bond, which has a Morningstar Analyst Rating™ of Gold, and unrated Fidelity® Series Investment Grade Bond.
- On the passive side, Vanguard Total Bond Market Index also collected large sums of fixed-income-oriented money.
