Defection of PIMCO CIO Bill Gross sets investment world abuzz

In Canada, our research team places PIMCO Monthly Income under review.

Rudy Luukko 27 September, 2014 | 2:03AM
Facebook Twitter LinkedIn

Today's announced defection of the world's best known bond manager, Bill Gross, from Pacific Investment Management Co. (PIMCO) -- the US$2-trillion manager for which he was chief investment officer and co-founder -- has set the investment world abuzz.

Gross is joining Denver-based rival Janus Capital Group Inc. JNS, effective Sept. 29. He'll manage the recently launched Janus Global Unconstrained Bond and related strategies, effective Oct. 6. In addition he'll join Myron Scholes and other members of the Janus team focused on global asset allocation, Janus said in a release. Gross will be based in Newport Beach, California, which is also the location of the head office of the company he co-founded in 1971.

Reflecting the significance of Gross's departure, PIMCO's majority owner Allianz A.G. , the Munich-based financial-services giant, said Gross's replacement as CIO would be announced today. There was no immediate comment from PIMCO itself on the loss of its CIO, who has been the face of the firm for more than four decades.

In Canada, where PIMCO expanded into the retail mutual-fund market in January 2011, it is best known for the $6.1-billion PIMCO Monthly Income  . This fund has received a 5-star Morningstar Rating in the Global Fixed Income category for its historical risk-adjusted returns and a Silver Rating from Morningstar Canada's manager-research team.

Effective today, the Silver Rating is under review. While Gross was not involved in managing the Canadian mutual funds, his presence has shaped PIMCO's strategies.

 
Bill Gross

In Janus's release today, Gross said he looks forward to "returning my full focus to the fixed-income markets and investing, giving up many of the complexities that go with managing a large, complicated organization." He said he chose to join Janus because of his "longstanding relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets."

Weill praised Bill Gross for having "an exemplary track record with decades of success." Weil added that Gross's focus on macro, unconstrained strategies will complement the work of Janus's credit-based fixed-income team.

In the U.S., Morningstar named Gross and his investment team Fixed Income Manager of the Decade for 2000-2009 and Fixed Income Manager of the Year for 1998, 2000 and 2007.

However, Gross isn't leaving PIMCO on a high note. His flagship fund, PIMCO Total Return, the world's largest bond fund, had experienced net investor outflows for 16 consecutive months. Gross's management style had also come under fire following the departure in January of former CEO Mohamed El-Erian, who had been widely viewed as a potential successor to Gross.

 Click here for Morningstar.com's take on the departure of Bill Gross from PIMCO.

Facebook Twitter LinkedIn

About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.

© Copyright 2023 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy       Disclosures        Accessibility