PIMCO’s star manager, Bill Gross, is moving on to Janus. By some accounts, the Janus brand will be rejuvenated with the arrival of the “bond king,” a moniker earned over a long run of outsized returns in plying the waters of fixed income. But his track record in recent years has looked increasingly wobbly, a familiar strain that tends to arise eventually as the challenge of beating the market rises for everyone through time. The main lesson here, however, is less about quantitative results vs. what might be called manager risk. When your favorite stock picker (or in this case bond picker) abruptly heads for the exit, for whatever reason, dealing with the blowback can be cumbersome.
Continue reading →