Large ETFs are likely to be the main beneficiaries of Gross’s withdrawal from PIMCO
Large and established bond ETFs seem to be the biggest beneficiaries of Bill Gross’s exit from PIMCO to join Janus Capital Group. BlackRock (BLK), the world’s largest ETF player, currently seems to be the biggest beneficiary of Gross’s withdrawal.
The iShares Core U.S. Aggregate Bond fund (AGG) is the second-largest fixed-income ETF. It reported $752.3 million of inflows in the two days after Gross’s September 26 departure from PIMCO. That represents a 4.1% increase in shares outstanding in the $19.2 billion fund.
In contrast, analysts estimated the September monthly net flows for the Total Return Fund to be -$23.5 billion. The largest daily outflow occurred on the day of Bill Gross’s resignation from the firm, while outflows on the two following days were considerably smaller.
The largest fixed-income ETF is the Vanguard Total Bond Market ETF (BND). It has more than $21 billion in assets. The details of inflows at Vanguard weren’t immediately available.
Janus is also likely to benefit
The other obvious beneficiary is Janus Capital (JNS). Janus was primarily an equity-based investment house. As a part of its strategy, Janus has tried to establish itself in bond funds in order to have a stabler income stream.
With the arrival of Bill Gross and the main fund that he will be managing—Janus Global Unconstrained Bond (JUCTX)—Janus can expect to see a pickup in its bond fund portfolio. A name as big as Gross’s will lend much-required credibility to Janus’s fixed-income business. Gross’s entry will enable the fund to successfully diversify its business. It will also let Gross take bets on smaller opportunities that may arise—such as those in three-month Treasury bills (see the chart above).