Gross Leaves PIMCO for Janus, Will Investors Follow?

billgrosspimco

In a surprising move to bond investors, Bill Gross, the founder of bond giant Pacific Investment Management Company (PIMCO) has resigned – sending shockwaves to the fixed income world. Gross started PIMCO in 1971. Gross is moving over to Janus Capital, a rival of PIMCO. PIMCO is a subsidiary of Germany-based Allianz. PIMCO has been under a barrage of bad news in recent times, with the exiting of then-CEO Mohamed El-Erian and the SEC’s investigation to see if PIMCO pumped up returns on its exchange-traded fund (ETF), the Pimco Total Return Exchange-Traded Fund. However, there is a level of controversy over the SEC’s investigation into PIMCO as a number of ETF experts defend the industry, such as data provider ETF.com’s CIO Dave Nadig, there are “real issues in the structure of the bond market and the pricing-service model of establishing fair value.”

Since May 2013, PIMCO has faced outflows from investors to the tune of US$ 65 billion.

A major reason why institutional investors drop mandates is key personnel changes.

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