Fund groups hail PIMCO outflows as successful 'stress test'

Leading investment firms have told US regulators that the departure of Bill Gross from PIMCO was a "stress test" that the industry has passed.

In letters to the US Financial Stability Oversight Council (FSOC), BlackRock and Fidelity said that the outflows from Pimco's mammoth Total Return Strategy demonstrated the industry's ability to absorb sudden excess assets. FSOC is investigating whether asset managers and their activities, including mutual funds, should be placed under greater scrutiny. The letters were submitted as part of a consultation process with the industry. BlackRock's vice-chairman Barbara Novick wrote: "The recent example of outflows from PIMCO's Total Return strategy following the resignation announcement o...