Two trillion dollar fund PIMCO is getting its swagger back, but its not because of superstar founder Bill Gross.
As Mary Childs and Charles Stein over at Bloomberg report, PIMCO has some rising stars that are outshining their CEO.
Nine of Pimco’s 15 largest mutual funds are beating at least 75 per cent of peers so far this year, according to data compiled by Chicago-based research company Morningstar Inc. None of those top performers are managed by Chief Investment Officer Gross. Of the four funds trailing more than half their rivals, three including the Pimco Total Return Fund are run by the 70-year-old investor known as the bond king.
Gross has been undermined this year by bets on shorter-term debt, trailing 89 per cent of his peers in July, as rising managers including Daniel Ivascyn, Mihir Worah and Mark Kiesel have outperformed.
The firm really wants to convey that there are fresh ideas at PIMCO. Performance has been lagging, and in 2013, investors redeemed a total of $US41.1 billion from the fund.
Those problems took center stage in March when Gross’ right-hand, Mohamed El-Erian, abruptly left the firm.
Suddenly, everyone was talking about what was wrong with PIMCO, and one reason that was repeated up and down the Street was that Gross was a “cowboy” who saw his fund as a one-man show.
After that, things got weird. Like when he spoke at Morningstar’s annual investor conference in Chicago in June and approached the stage to a bad cover of ‘Smooth’ by Carlos Santana and Rob Thomas wearing sunglasses.
We’re hoping this success will give Gross some time to relax.
Business Insider Emails & Alerts
Site highlights each day to your inbox.