PIMCO's Unintended Consequences ...

Things are rapidly shifting from bad to worse for PIMCO.

In a triple whammy this morning, Bloomberg reports the Total Return Fund ETF (managed previously by Bill Gross) has suffered $446 million outflows (or over 12.5% of assets) so far; Morningstar downgrades the fund from 'gold' to 'bronze' citing "uncertainty regarding outflows and the reshuffling of management responsibilities".

Perhaps most concerning - given our previous warnings over bond market illiquidity - The FT reports, US regulators are monitoring trading and fund flows surrounding PIMCO's Total Return Bond fund, warning investors they should contemplate the unintended consequences of pulling their money and the possibility of systemic risk disruptions, fearful of "runs."