One of the most prominent names in fixed income investing reportedly suffered a tough year in 2018.
A bond fund managed by renowned fixed income rainmaker Bill Gross has suffered about $60 million of redemptions in December, the 10th straight month of liquidations amid impatience over misplaced market bets, a news report said.
Gross oversees the Janus Henderson Global Unconstrained Bond Fund and the latest outflows cut its assets to $950.4 million, down from $2.24 billion in February last year, Bloomberg said (Jan 13, 2019), quoting its own estimates. The news wire said that a spokesperson for the firm could not be reached immediately for comment.
The report said that investors have scuttled from the fund because bets placed by the fund anticipated that rates on US Treasuries and German bunds would converge – a prediction that has not borne fruit. Bloomberg said that Gross’s fund has not performed as well as its rivals in the same sector in 2018.
Gross achieved his prominence at PIMCO, aka Pacific Investment Management Co. His views about macro-economics and the global debt market have been as eagerly sought as, say, those of Warren Buffett on the stock market.
The newswire said that Gross leveraged up his bond fund through the use of futures during the first half of 2018, but he suffered large losses.
Managing bond funds has been a source of frustration for some managers wondering when, or if, the market for global interest rates will ever return to normality.