Why some unconstrained bond funds are seeing investor outflows

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Nov. 26 2019, Updated 6:55 p.m. ET

Bill Gross leaves PIMCO and joins JUCIX

In this section, we’ll continue our look at some of the more prominent names in the non-traditional bond (BASIX) category:

  • PIMCO Unconstrained Bond Fund A (PUBAX)
  • Janus Unconstrained Bond Fund I (JUCIX)

 

PIMCO Unconstrained Bond Fund A (PUBAX)

PUBAX numbers among the older and larger funds in the category. The fund launched in June 2008. Net assets were estimated at $18.7 billion as of September 30, 2014. The fund has returned 2.4% in the year to date.

Bill Gross’ exit from PIMCO: Impact on PUBAX

PUBAX experienced ~$10.9 billion in outflows in the 12 months to September 2014. These figures included withdrawals of ~$3.2 billion in September alone.

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Legendary bond investor Bill Gross left Pacific Investment Management Co. (or PIMCO) in September, causing investors to exit en masse from PIMCO-sponsored funds. Total outflows for all of PIMCO’s funds were estimated at $23.5 billion in September. These include $17.9 billion from PIMCO’s flagship PIMCO Total Return Fund (PTTRX).

In contrast, the SPDR S&P 500 ETF (SPY), the Vanguard Total Bond Market ETF (BND), and the Vanguard Total Stock Market ETF (VTI) reported respective net inflows of $9.8 billion, $3.9 billion, and $2.1 billion. The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Total International Stock ETF (VXUS) had respective net inflows of $2.6 billion and $3.2 billion—this data, according to Morningstar.

Janus Global Unconstrained Bond Fund I (JUCIX)

Bill Gross is now managing Janus’ unconstrained bond fund, JUCIX. This is a very new fund, launched on May 27, 2014. Net assets totaled just ~$79 million at the end of September. The fund is targeted at institutional investors, and requires a minimum investment of $1 million. Fund returns in 2014 year to date were -0.95%.

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