Bill Gross's Fund At Janus Sees First Monthly Outflow

Mar 10 2015 | 6:03am ET

NEW YORK (Reuters) - Investors pulled $18.5 million from Bill Gross's Janus Global Unconstrained Bond Fund <JUCAX.O> in February, the first such cash withdrawal since the closely watched investor took on the portfolio in October, Morningstar said on Monday.

The Janus Global Unconstrained Bond Fund's assets under management stood at $1.45 billion at the end of February, down from $1.46 billion at the end of January, its highest in net assets, according to Morningstar data.

"The fund has declined in value year-to-date, which given its short record, is discouraging," said Todd Rosenbluth, director of ETF & mutual fund research at S&P Capital IQ Global Markets Intelligence.

"We think many investors will wait to see if Gross can establish a strong longer-term record before considering adding money."

Overall, Janus's mutual funds saw net inflows of $449.5 million in February, Morningstar said.

Flows to Gross's new fund have been choppy. After taking in $770 million in November, the fund had net deposits of $176 million in December and just $85.6 million in January, according to Morningstar data.

In January, Janus Capital Chief Executive Dick Weil said on a conference call that Gross had pumped more than $700 million of his own money into the fund.

Gross, who built Pimco into one of the largest investment firms in the world, resigned from the firm Sept. 26 to join Janus Capital Group Inc <JNS.N>.

A Janus spokeswoman had no comment.

In an April 2013 investment letter, Gross then told his Pimco clients that solid returns were going to be difficult to replicate in the years to come, given unconventional central bank actions across the world.

"All of us, even the old guys like (Warren) Buffett, (George) Soros, (Dan) Fuss, yeah – me too, have cut our teeth during perhaps a most advantageous period of time, the most attractive epoch, that an investor could experience," Gross said.

"Since the early 1970s when the dollar was released from gold and credit began its incredible, liquefying, total return journey to the present day, an investor that took marginal risk, levered it wisely and was conveniently sheltered from periodic bouts of deleveraging or asset withdrawals could, and in some cases, was rewarded with the crown of 'greatness.'"

Last Monday, Gross said in his latest investment letter for Janus: "Own high quality bonds and low P/E, high quality stocks if you want to stay out of the doghouse."

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