A Recent Wells Notice and continued outflows in Pimco’s Total Refund Bond suggest the Bill Gross effect may linger
According to Dieter Wemmer, CEO of Allianz, Bill Gross’ bad breakup with Pimco is a thing of the past.
“I think the Bill Gross discussion has subsided and it is really much more a discussion about how to allocate the money best in the current financial market environment,” Wemmer told CNBC yesterday.
Gross managed Pimco’s Total Return Bond fund, once the largest bond fund in the world, until his sudden departure to rival firm Janus Capital. Since then, the fund has experienced record outflows, making some advisors nervous about the fund’s continuing viability.
Investors withdrew $2.5 billion in assets from the fund in July, according to the Pimco website, down $3 billion from the month before. Under Chief Investment Officer Dan Ivascyn, Gross’ successor, the fund posted approximately $1.4 billion in inflows over the same month.
Wemmer has been quick to assert that the performance of “the Total Refund Bond fund has had an excellent performance year-to-date,” adding that “it is almost back to its shiny days in performance.” Still, a recent Wells Notice from the SEC is raising eyebrows.
Last week, Pimco announced that it had been served a Wells Notice by the SEC. Allegedly, Pimco may have mispriced bonds for its Total Return Active ETF, an exchange-traded fund related to its Total Return mutual fund, all the while Gross was in tenure. While a Wells Notice does not definitively indicate that charges will be made, it does not bode well for the global investment solutions provider.
Though Wemmer insists that the Gross discussion is a thing of the past, plenty of advisors are noting his continued influence on Pimco’s assets.
