The bond world was shaken in September of this year, as it was announced that Bill Gross would be leaving PIMCO for rival Janus Capital. After spending 40 years building PIMCO from the ground up, tensions between Gross and other executives ultimately led to his departure.
Since Bill Gross’s departure, PIMCO has seen outflows of approximately $50 billion, as investors quickly rushed out of arguably the most famous bond fund in the world. During that time, about $1 billion made its way into Janus products, with Gross’s new fund, the Janus Global Unconstrained Bond (JUCDX), sitting at the forefront of the movement.
Now, all eyes are on Janus and how it will press forward with the king of fixed income at the helm. Already, there has been a lot of eagerness surrounding the move, as George Soros announced that he has invested $500 million with Gross (to be managed separately from JUCDX, but with the same strategy).
JUCDX, which now has nearly $450 million in assets under management, has seen massive growth over the last few months. As of 9/30/2014, according to the fund’s fact sheet, JUCDX had just $79 million in assets, meaning it has taken in approximately $400 million in about two months. The fund takes a global approach to the fixed income world, investing in debts from all across the world. It tends to focus mainly on investment-grade securities and currently has a heavy tilt towards cash and cash equivalents with Treasuries coming in second place.
The fund charges 1.08% for investment with a minimum investment threshold of $2,500. As a diversified product, JUCDX can be used as a core part of any fixed income strategy.
Many are interested to see how Gross will perform under these new circumstances, as he had been accused of losing his touch over the last few years at PIMCO (though his overall track record is quite impressive).
Janus and the ETF World
Just two weeks after Gross made his move to Janus, the company announced that it would acquire the holding company of VelocityShares, LLC, a provider of exchange traded products. Though it took some time, PIMCO eventually entered the ETF world with great success, gathering billions in assets across its funds. Now, Janus appears to be gearing up for a similar move as it will likely provide ETF versions of some of its products [see also How PIMCO ETFs Have Handled Bill Gross’s Departure].
Keep a close eye on Janus in the coming months as it is likely to make its ETF debut, which is music to the ears of those who have grown wary of the mutual fund wrapper.
The Bottom Line
Bill Gross’s prowess in the bond world is what makes this shakeup so interesting. Time will tell if he is able to bring the same successes to Janus, but he certainly kicked things off with a bang.