By Kirsten Grind
Investors pulled $18.5 million from Bill Gross's new fund at
Janus Capital Group Inc. in February, the first monthly withdrawal
since he moved to the firm in September, according to data from
research firm Morningstar Inc.
After a fast start, inflows into the Janus Global Unconstrained
Bond fund have been declining since December. The slowdown has led
some analysts and industry observers to question Mr. Gross's
ability to capture some of the $190 billion that has left his
former home, Pacific Investment Management Co., since his departure
last fall.
Assets in Mr. Gross's fund at Janus sank to $1.45 billion at the
end of February from about $1.5 billion a month earlier, according
to Morningstar. Overall, Janus's mutual funds saw net inflows of
$449.5 million in February. Asset totals also take into account
market appreciation and other factors.
A Janus spokeswoman declined to comment.
Mr. Gross, who previously ran Pimco's flagship Total Return
fund, the world's biggest bond fund by assets, could be hamstrung
by his fund's new strategy, which is unfamiliar to many investors,
said Jeff Tjornehoj, head of Americas research at fund tracker
Lipper. An unconstrained bond fund is able to invest in a wider
range of securities than a total return fund.
"It's a very different portfolio than what he's best known for
at Pimco, " Mr. Tjornehoj said. "It's going to have some limited
appeal."
Mr. Gross abruptly left Pimco, where he was chief investment
officer and co-founder, after rising tensions with executives at
the firm and a period of spotty performance. When he left, the big
question on the minds of investors and analysts was how much money
he would be able to attract at a new firm.
Initially, it appeared Mr. Gross was doing fairly well, with his
new fund jumping in asset size from about $12 million when he took
over in September to more than $1 billion by November. But after a
report in The Wall Street Journal, Janus confirmed in January that
Mr. Gross had invested "more than $700 million" in the fund
himself.
Janus, with a total of $183 billion in assets under management,
had suffered outflows from its mutual funds for years before Mr.
Gross's arrival, and some analysts and investors hoped he would
help buoy the company. The company's stock, which saw its biggest
gain in its 45-day history on the day Mr. Gross arrived, has gained
about 13% since early October. Monday afternoon, Janus's stock was
up 1.6%, to $16.56.
Citigroup analyst William Katz said in a research note in early
February that Janus investors were overestimating the potential for
inflows related to Mr. Gross and affirmed his "sell" rating on the
firm. The note came after Morningstar reported January inflows of
$86 million into Mr. Gross's fund, the smallest amount since he
arrived at the firm. "Volumes related to Bill Gross remain
underwhelming," Mr. Katz wrote.
Since he began trading in his fund Oct. 6, Mr. Gross has lost
1.2% through March 6, lagging behind 83% of similar funds,
according to Morningstar.
Meanwhile, investor outflows from Pimco's Total Return fund are
slowing. The company said last week that the fund saw $8.6 billion
in outflows, the lowest monthly amount since Mr. Gross's departure.
The fund had $124.7 billion in assets at the end of February.
Write to Kirsten Grind at kirsten.grind@wsj.com
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