Bill Gross Sends Ripples Throughout Wall Street

Bill Gross Co-Founder of PIMCO that specialized in fixed income investing an has been in the top tier of fixed income investing for over 30 years. Under Bill Gross PIMCO became the largest fixed income management company in the world with over a $1 trillion dollars under management. Bill Gross for over 30 years has management PIMCO's flagship Total Return Fund (PTTRX) which is currently the largest bond fund in the world with $225 billion in assets under management. Under Gross's leadership the fund outperformed its peers in all categories over the last 30 years and over the last 15 years the fund as average 6.2% annual returns. Bill Gross got his name as the Bond King by outperforming his peers over the long-term an running the bond fund in the world. But the last eight months has been a nightmare for Bill Gross from his flagship fund under performing its peers and having constant outflows, to his hand picks successor Mohamed EL-Erian departure earlier this year. All of this has lead Bill Gross who co-founded PIMCO 43 years ago to leave the company an go to Janus Capital Group (JNS).

PIMCO CEO Douglas Hodges in a statement hinted at Bill Gross Departure ""While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCO's clients, over the course of this year it became increasingly clear that the firm's leadership and Bill have fundamental differences about how to take PIMCO forward,"

Bill Gross said today in statement about is departure from PIMCO,

"Today, with a mixture of excitement and sadness, I am announcing that I have decided to join Janus Capital Group and end my association with PIMCO," Gross said in a statement. He went on to say "But now, after having spent considerable time serving in senior management, it is a time for me to reduce executive and people management responsibilities at a larger firm and focus on the pure aspects of portfolio management at a smaller one. Janus is the right fit at the right time in my career - and my life.

PIMCO's Total Return Fund Outfund and Inflows

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go to this article to read more on PIMCO assets outflows an problemshttp://www.gurufocus.com/news/276852/pimco-16-months-of-straight-decline-in-assets

Janus Captial Group (JNS) Move

As PIMCO got bigger and bigger, Gross was forced into more an more management duty that took up massive amount of time. This kept Gross from focusing on his love of investing in the bond market. At Janus Gross will Be able to get back to what he does best investing in the bond market and get the kind of return he has been unable to do at PIMCO. At Janus Gross will run the newly created Janus Global Unconstrained Bond Fund (JUCTX) which has assets under management of $12 million which is far, far less then PIMCO's Total Return of over $200 billion.

In a statement issued through Janus, Bill Gross said,

“I look forward to returning my full focus to the fixed income markets and investing, giving up many of the complexities that go with managing a large, complicated organization. I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets.”

Ariel Investment portfolio manager John Miller called Bill Gross move to Janus a "Black Swan Event". Ariel Investment is one of Janus top investors, and Mr. Miller believes that Gross will help the company regain its former glory. Bill Gross going to Janus is great for the company since the firm hasn't recovered from the financial crisis and has had constant outflows the last few years. Will Gross management $12 million will give him the flexibility to invest where his larger competitors can't and give the the fund above average returns. I believe that Gross will be able with less money under management be able to outperform and achieve returns that he has been unable as of late. I think buying Janus Global Unconstrained Bond Fund(JUCTX) would be a smart long-term play with assets currently at $12 million its clear that the Bond King running this fund will lead to the funds assets exploding in size. Getting in when the fund is small an able to invest in overshadowed parts of the bond market where the funds larger competitors will give the fund a competitive advantage over its peers.