How Does Bill Gross Stack Up to Janus Funds?

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One big question has been on investors’ minds ever since Janus Capital Group (JNS) hired Bill Gross. Did Janus hire him as a public relations move … or is there actually a space that needs to be filled in the fixed-income category of Janus funds?

pimco bill grossOf course part of the equation, which is now common knowledge in the financial media, is that Bill Gross was about to be fired from PIMCO and the former bond fund king is not quite ready to hang up his crown and enter the world of retirement. At least not until he has a shot at a new fixed-income reign at Janus funds.

A good way to confirm the compatibility of the new Gross/Janus funds union is to do some of the homework that each side likely did as part of their due diligence prior to forming a relationship: Compare the performance and style of Bill Gross’ biggest bond fund at PIMCO with a comparable Janus fund, as well as a PIMCO/Janus funds comparison that share a few striking similarities.

 

Bill Gross vs Janus Funds: PIMCO Total Return (PTTRX) vs. Janus Real Return (JURTX)

Pimco fundsPIMCO Total Return (PTTRX) is Bill Gross’ flagship fund and the biggest bond fund in the world. Even though Gross had one hand tied behind his back with the distracting drama at PIMCO in recent months, the Total Return fund easily outperformed the comparable Janus Real Return (JURTX).

Both funds hold bonds at the higher end of credit quality and liquidity, including healthy doses each in U.S. Treasury Bonds and bonds on the shorter end of maturity at around 5 years. But that’s about where the similarities end.

JURTX has a nice yield of 3.08%, compared to 1.91% for PTTRX, but Bill Gross wins in performance. Although his year-to-date and 1-year performance ranks are both hovering around in the bottom 20% of similar funds, PIMCO Total Return ranks above-average in longer periods, including an impressive rank for 10-year returns that puts PTTRX above 94% of other funds.

Janus Real Return has only been around for about 3 years but its year-to-date, 1-year and 3-year ranks are in the dirt — the bottom 10% or worse.

Bill Gross vs Janus Funds: PIMCO Unconstrained Bond (PUBAX) vs. Janus Unconstrained Bond (JUCAX)

JanusAlthough Bill Gross’ name was on at least 15 PIMCO funds as manager, it’s difficult to know exactly how firm his grasp was on the helm of any one of those funds in recent months and even the past few years, when he seemed to be more of a public relations figurehead than fixed-income portfolio manager.

However, a PIMCO fund listing him as a manager from December of 2013 through his departure at the end of September, PIMCO Unconstrained Bond (PUBAX), is one with a strikingly similar style and name to his new fund, Janus Unconstrained Bond (JUCAX).

JUCAX doesn’t have enough of a track record for comparison (its inception date is May 27, 2014). But it is interesting to note that PUBAX has below-average performance for the 1-year, 3-year, and 5-year returns, while the year-to-date performance encompassing Bill Gross’ addition to the management is significantly above-average among the non-traditional category of bond funds.

It is also interesting to note that both the PUBAX fund summary and the JUCAX fund fact sheet highlight “long-term” returns as central to their objectives. Although the bond king’s crown is somewhat tarnished, his long-term record is still one of dominance.

Whether that strong long-term record will endure still remains an unknown but the unconstrained moniker of Bill Gross’ new portfolio at Janus funds seems to be fit for a king.

As of this writing, Kent Thune did not hold a position in any of the aforementioned securities. Under no circumstances does this information represent a recommendation to buy or sell securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/bill-gross-vs-janus-funds/.

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