Funds manager Pimco is 2022’s biggest loser

Funds manager Pimco is 2022’s biggest loser

A brutal 2022 for bonds delivered the worst year ever for Newport Beach-based Pacific Investment Management Co.’s exchange-traded fund business.

Investors pulled nearly $3.6 billion from more than 20 Pimco and Allianz-branded funds, the biggest cumulative outflow ever for the asset manager, Bloomberg data show. That exodus also ranked as the largest among U.S. issuers in 2022, a year when ETFs absorbed over $580 billion of inflows overall.

Volatility rocked Pimco’s bond-heavy ETF lineup in 2022 as a historically aggressive Federal Reserve attempted to combat the worst U.S. inflation in four decades. While fixed-income ETFs raked in billions overall, the bulk of that cash flooded into passive funds. Given that Pimco’s largest bond ETFs are actively managed, investors were quick to exit, according to Bloomberg Intelligence’s James Seyffart.

Roughly $194 billion flowed into bond ETFs in 2022 even though more than 90% of those funds posted losses. However, less than $10 billion of that haul went to actively managed funds, Bloomberg Intelligence data show.

While Pimco, Allianz SE’s asset management unit, did have some success stories last year — its long-dated, zero-coupon Treasury fund attracted roughly $600 million — pain at its biggest ETF dwarfed everything else. A record $4.4 billion exited from the $8.8 billion Pimco Enhanced Short Maturity Active ETF (ticker MINT), which once reigned as the largest active ETF, despite record demand for short-dated products.

Feds orders railroad to deliver animal feed

Federal regulators have ordered Union Pacific railroad to make sure Foster Farms gets the grain it needs in California to prevent millions of chickens and hundreds of thousands of cattle from starving.

It’s the second time in the past year regulators issued an emergency order related to delivery problems at Foster Farms, which is based in Livingston, as the railroad struggled with shortage of crews.

This time, however, Union Pacific blamed the weather for its problems. Spokesman Mike Jaixen said last month’s extreme cold and blizzard conditions slowed deliveries in 20 of the 23 Western states the railroad operated in, and additional problems are possible because of the forecast for more severe winter weather.

Markets slip on first day of trading in new year

Stocks gave up an early gain and ended lower Tuesday, a lackluster first trading day of 2023 for Wall Street just days after it closed the books on its worst year since 2008.

Technology stocks were among the biggest weights on the market. Apple fell 3.7%, leaving its market value below $2 trillion for the first time since March 8, 2021. Shares of the iPhone maker fell nearly 27% in 2022, its first annual decline in four years amid a broad slide in technology sector stocks.

The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.77% from 3.88% late Friday. Stock and bond markets were closed Monday for the observed New Year’s Day holiday.

Energy stocks also weighed on the market Tuesday as U.S. oil prices settled 4.1% lower. Hess fell 5.1%.

Facebook parent Meta Platforms rose 3.7% to lead a rally in communications services stocks. Gains in several big banks and other financial stocks also helped keep the market’s losses in check. Wells Fargo rose 1.2%.

Tesla plunged 12.2% for the biggest decline among S&P 500 stocks after the electric vehicle maker’s 2022 sales disappointed investors.

Compiled from Bloomberg and Associated Press reports.