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Janus fund, overseen by Bill Gross, posts $39.1 million outflow in June

By Jennifer Ablan
The Janus Global Unconstrained Bond Fund, overseen by Bill Gross, posted cash withdrawals of $39.1 million in June, the second consecutive month of outflows for the portfolio, Morningstar data showed on Friday.
Total assets in the fund, which is up 0.29 percent so far this year, were $1.45 billion at the end of June, Morningstar added.
The Janus Global Unconstrained Bond Fund is trailing 64 percent of its peer category so far this year. In May, the fund posted net outflows of $11.7 million and had assets under management of $1.5 billion at the end of the month.
Gross, known as the ‘Bond King’ for his decades-long run of successful returns, shocked fixed-income markets last September when he quit Pimco, the firm he co-founded and had built into a $2 trillion powerhouse, for Janus.
But his string of bold calls at Janus, including his “short of a lifetime” trade against German Bunds, has not translated into profitable trades.
“My famous (infamous?) ‘Short of a lifetime’ trade on the German Bund market was well timed but not necessarily well executed,” Gross wrote in his June investment outlook report to clients. He did not elaborate on the execution of the transaction.
If that weren’t enough, Gross recommended in June shorting the China Shenzhen Composite Index before its huge slump, saying on Twitter, “Some investors know a bubble when they see one but have new Chinese investors ever heard of a pyramid scheme or Mr. Ponzi? Doubtful.”
Gross never executed the trade, however. “I was trying to stick to my knitting, and China wasn’t really my knitting,” he told Bloomberg News earlier this week.
Janus Capital Group Inc announced earlier this month that Gross will be getting help running his mutual fund from Kapstream Capital Pty Ltd’s Kumar Palghat, after acquiring a majority stake in Kapstream.
Gross, who began managing the Janus Global Unconstrained Bond Fund in October, will continue to be primary portfolio manager, Denver-based Janus said. Palghat will be co-portfolio manager.
“The fund has performed only slightly better than the Barclays Aggregate benchmark this year, despite its flexibility to go anywhere and short bonds,” said Todd Rosenbluth, head of exchange traded fund and mutual fund research at S&P Capital IQ. “However, we think the recent acquisition should bring additional resources and assets to the fund, providing scale opportunities.”

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