Retirement plan fiduciaries may choose to put PIMCO’s $222 billion Total Return Fund on their “watch list” in the wake of Bill Gross’ departure as the firm’s chief investment officer.
The departure of such an important part of the PIMCO investment team certainly could be grounds for closer scrutiny of the Total Return Fund, ERISA lawyers say.
In a report Friday, the day that Gross made his surprise announcement, research and brokerage firm Sanford Bernstein said that Gross’ departure could spur 10 percent to 30 percent in redemptions from PIMCO funds.
Investors had been pulling money from the Total Return Fund as the world’s biggest bond fund trailed 63 percent of peers over the past year, on track to underperform a majority of rivals for the third year in four. The fund’s assets have shrunk from a peak of $293 billion last year.
Gross, who was in charge of $2 trillion at PIMCO, the bond manager he helped found 43 years ago, is joining Janus Capital Group Inc., a stock-fund manager. Janus shares surged 43 percent on the news of Gross’ hiring, the most in 14 years.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
