Is Bill Gross still the bond king? Maybe not. The quondam fixed-income royalty—at least by the recent reckoning of his current employer—got less than a ringing endorsement from his own boss, Janus Henderson CEO, Richard Weil, on Thursday.
‘And so he hasn’t lost faith in his fundamental view. But he’s been wrong and wrong badly in the short term. And he’s accountable and we’re accountable for that’ —Richard Weil, CEO at Janus Henderson CEOThe less-than-flattering statements about the 74-year market maven, made by Weil during an early morning interview on CNBC, comes as investors have pulled money out of Gross’s Janus Henderson Global Unconstrained Bond JUCAX, +0.23% for a fifth straight month, according to a Bloomberg News report. The report indicates that Gross’s signature fund has seen $200 million in redemptions just last month, rapidly shrinking the assets that he manages to $1.25 billion from $2.24 billion.
Oddly enough, to folks who have followed Gross, those losses emanate from bets he made on U.S. Treasurys TMUBMUSD10Y, -0.89% and German government bonds, known as bunds TMBMKDE-10Y, -6.08% expecting that the gap between the pair of sovereign debt rates would converge. They haven’t.
The interesting aspect of those investment plays is that it hews with previous wagers that have failed to come good for Gross. In 2015, Gross declared bunds, the “short of a lifetime.” He told CNBC that same year that “It’s just a question of when,” referring to that bund bet materializing.
Gross: German 10yr Bunds = The short of a lifetime. Better than the pound in 1993. Only question is Timing / ECB QE
— Janus Henderson U.S. (@JHIAdvisorsUS) April 21, 2015
