Bill Gross, manager of the world's largest bond fund at Pimco, said Tuesday that risk assets should outperform cash this year and post higher returns if central banks can convince investors that easy money policies are stimulating growth.

"If global central bankers can convince investors that their abnormal policies can recreate a semblance of the old normal economy, then risk assets at the outer edges of our circle will have higher future returns than otherwise," Gross said in his monthly letter to investors, titled "The Second Coming."

Gross, co-founder and co-chief investment officer at Pimco, said that risk assets such as stocks and high-yield bonds are "not necessarily mispriced" despite central banks' easy money policies that have kept interest rates artificially low.

Gross said that the U.S. Federal Reserve - which has kept its benchmark short-term borrowing rate, the Fed Funds rate, near zero since late 2008 and bought trillions of dollars in bonds to help stimulate the economy - will need to convince investors that its recent push for more "qualitative" guidance is effective.

Gross cited comments from St. Louis Fed President James Bullard, who said in mid-February that he expected the Fed to drop its economic thresholds and have to "make more qualitative judgments" on when to tighten policy.

Gross cautioned investors to "longer-term consequences," however, and said that liquidity in corporate bonds will be "challenged" as the Fed winds down its quantitative easing. He also said assets may be mispriced if inflation emerges.

In recent months, Gross has recommended investors buy short-dated bonds on the premise that the Fed will keep the Fed Funds rate between 0.-0.25 percent until at least 2016.

The Fed is taking the first steps towards a more normal footing, however. The central bank trimmed its bond buying by $10 billion in each of the past two months and expects to raise interest rates sometime next year as long as the economy continues to improve.

Gross's flagship Pimco Total Return Fund posted $1.6 billion in outflows in February, reducing the fund's assets to $236 billion, according to data from Morningstar. That marked the fund's 10th straight month of outflows.

Investors pulled $41.1 billion from the fund last year, marking the biggest annual outflows from any mutual fund in history, according to Morningstar. The fund lost its title as the world's largest mutual fund to the Vanguard Total Stock Market Index Fund last October.

The fund rose just 0.52 percent last month, trailing 71 percent of its peers according to preliminary Morningstar data. The performance also slightly trailed the 0.53 percent gain of the benchmark Barclays U.S. Aggregate bond index.

The Pimco Total Return Exchange-Traded Fund, an actively managed ETF designed to mimic the strategy of the flagship mutual fund, posted outflows of $42.6 million in February. That also marked the 10th straight month of withdrawals from the ETF, which has $3.5 billion in assets, according to Morningstar data.

Pimco's succession plan has been in the spotlight since January's stunning announcement that Mohamed El-Erian, its chief executive officer and co-chief investment officer, was resigning.

The investment firm has named Dan Ivascyn, Andrew Balls, Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah as deputy chief investment officers.

Gross has called the collection of six new deputy chief investment officers a "significant improvement" from Pimco's previous structure, which concentrated nearly all investment strategy decisions on the shoulders of Gross and El-Erian.

The DoubleLine Total Return Bond Fund, a Pimco competitor run by Jeffrey Gundlach, attracted $210.5 million in new cash last month, marking its first inflows in nine months and bringing assets in the fund to $31.4 billion.

Pacific Investment Management Co, a unit of European financial services company Allianz SE, had $1.91 trillion in assets as of December 31, according to the firm's website.

(Corrects seventh paragraph to say Gross expected low Fed Funds rate until at least 2016)

(Reporting by Sam Forgione; Editing by Chizu Nomiyama and Nick Zieminski)