By Jennifer Ablan

NEW YORK (Reuters) - Investors pulled less than $200 million in July from the Pimco Total Return Fund, one of the largest bond funds in the world, following about $800 million of cash withdrawals the previous month, Pimco said on its website Tuesday.

The Pimco Income Fund, seen by many in the industry as Pimco's new flagship fund and overseen by group Chief Investment Officer Dan Ivascyn, posted inflows of $1.2 billion last month. The fund has attracted a total of $23.9 billion this year and in 2015, Pimco said.

The Total Return Fund had assets under management of $86.8 billion as of the end of July, compared with its peak of $292.9 billion in April 2013.

The Income Fund had assets under management of $62.7 billion for the same period.

"Improvement from prior months is a modestly encouraging sign that sentiment has started to improve for the flagship Total Return fund," Todd Rosenbluth, director of ETF and mutual fund research at S&P Global Market Intelligence, said. "However, one month is not a trend and investors may not remain loyal."

The Pimco Total Return Fund posted returns of 1.08 percent after fees in July, outperforming the benchmark return of 0.63 percent. Year-to-date through July, the fund has posted returns of 5.02 percent after fees, trailing the benchmark, which has returned 5.98 percent.

The portfolio outperformed in July because equities gained, credit spreads tightened and emerging market assets performed well, while most sovereign yield curves flattened with front-end rates generally drifting higher, Pimco said in a statement.

"Rate strategies in both the U.S. and the eurozone (mainly the periphery) added to performance. Holdings of TIPS were also additive, as were the fund's non-agency MBS positions," Pimco said. "Credit strategies including positions in financials, municipals and dollar-denominated EM debt, all benefited performance."

Like BlackRock Inc and Janus Capital Group Inc, Pimco includes dividend reinvestments in its inflow figures. Research organizations such as Morningstar and the Investment Company Institute, along with many fund managers, such as Vanguard, Fidelity and DoubleLine, exclude reinvestments and treat only fund share purchases as inflows.

(Reporting by Jennifer Ablan; editing by James Dalgleish and David Gregorio)