As we (really, allofus) noted a couple of months back, Bill Gross suffered the worst day of his career (and, given the lack of daylight between his career and his life, probably that, too) on May 30, when he somehow piloted his bond fund to a 3% drop. In spite of at least one bright spot since then, things haven’t really gotten much better, possibly because he’s spending too much time coming up with ways to make his ex-wife miserable rather than ways to not lose his investors (by which we primarily mean Bill Gross at this point) money. His Janus Henderson Global Unconstrained Bond Fund is down 7.6% this year, and is also in the red since he started it back in 2014, vowing to clobber his old fund, the PIMCO Total Return Fund. (Needless to say, he hasn’t.)
At this point, it’s worth stepping back to wonder whether we’re witnessing the end of the line for Gross, the 74-year-old billionaire who co-founded Pacific Investment Management Co. and once ran the world’s largest mutual fund….
In many ways, Gross is acting less like a bond investor and more like a hedge fund manager — and not a good one. Over the past year, his Sharpe Ratio, which measures return per unit of risk, is staggeringly low, at minus 2.17…. Each calendar year, his performance relative to peers has become worse…. In 2018 alone, the retail share class of his fund has lost 7.6 percent, worse than the rest of its peer group and any U.S. fixed-income fund with more than $1 billion in assets. Over the past three years, it’s lost an annualized 1.5 percent, also trailing every peer. Not a single fixed-income fund tracked by Bloomberg with more than $1 billion in assets has posted a negative return over that same three-year stretch…. ne was the fourth consecutive month of withdrawals, bringing the fund’s assets down to just $1.48 billion. Much of that is probably Gross’s personal money….
Of course, Gross has essentially vowed not to retire until he’s soundly beaten the men and women gathering in the Bill Gross Room down the road at PIMCO, and since it’s becoming clear that will never happen, Chappatta’s obituary may be a bit premature. On the other hand, if this keeps up, Gross will be paying his enormous water bills with proceeds from stamp sales. The good news is he’ll no longer have the “practically limitless financial resources” currently being brought to bear on making his ex-wife miserable.
Bill Gross Is Ahead of the Pack in Losing Money [Bloomberg]