Is Bill Gross Still the Bond King?

As fund manager Bill Gross nears the third anniversary of his dramatic departure from PIMCO (which he co-founded and built into the world’s largest fund manager), his performance has been so-so, according to a recent article in Bloomberg. “Three years,” the article says, “is an important milestone for a money manager, because that’s when many financial advisers and institutional investors decide his track record is long enough to be meaningful.” While he managed the Pimco Total Return fund from 1999 to 2014, it outperformed 96% of its peers (data from Morningstar). His current fund (Janus Henderson Global Unconstrained Bond Fund) […]

Gross on Threats to Economy Going Forward

The quantitative easing that has occurred in the post-Lehman era has led to a situation, writes fund manager Bill Gross in a recent Barron’s article, where central bank balance sheets are replete with equities “in a desperate effort to keep global economies afloat.” Concurrently, he argues, more than $5 trillion of investment grade bonds “trade at negative interest rates in what can only be called an unsuccessful effort to renormalize real and nominal GDP growth rates.” This environment, he warns, presents a degree of economic uncertainty down the road because both central bankers and private economists rely on historical models […]

Bill Gross Forecasts Below-Par Economic Growth

In a recent article for Barron’s, fund manager Bill Gross argues that investors have “resorted to ‘making money with money’ as opposed to old-fashioned capitalism when money and profits were made with capital investment in the real economy.” This, he argues, will suppress real economic growth going forward. Gross explains that factors such as the replacement of workers with robots and trade-restrictive government policies present a “counterforce to creative capitalism in the real economy” which in turn causes investors to sense future threats to consumer demand and investment returns. So, instead of channeling dollars into the real economy, they turn […]

Pimco’s New Investment Chief Bears Little Resemblance to Bill Gross

Dan Ivascyn, successor to Pimco co-founder Bill Gross as the firm’s investment chief, is overseeing what is characterized in a recent Wall Street Journal article as “a new direction taken by the California money manager as it recovers from the most tumultuous period in its history.” Gross resigned from Pimco in September of 2014 in the wake of much unrest. The article explains, “Hundreds of billions in client money followed Mr. Gross out of Pimco,” but Ivascyn was able to “stop the outflows with a team of managers who oversees more than $1.5 trillion—one of the largest asset pools anywhere […]

Bill Gross Warns Investors to Preserve Capital

Under current conditions, warns bond guru Bill Gross, investors would be well served to focus more on preserving capital than earning high returns, according to a recent CNBC article. Given the huge amount of debt on our country’s books (upwards of $65 trillion), Gross says, “Our highly levered financial system is like a truckload of nitroglycerin on a bumpy road.” Manager of the $1.9 billion Janus Unconstrained Bond Fund, Gross feels that the Fed has held things steady so far, but has to be careful not to raise rates so much that the cost of capital becomes prohibitive but enough […]