Building a new bond fund isn’t easy these days, as even Bill Gross is learning at his new post at Janus Capital Group.
Investors withdrew $39.1 million in June from the Janus bond fund that Gross manages, more than triple the outflow in May, according Morningstar Inc. estimates.
The fund, known as Janus Global Unconstrained Bond A, ended the month with $1.45 billion in assets, the Chicago research firm said. The fund had net outflows of $11.7 million in the previous month, Morningstar said.
The withdrawals, while not large by industry standards, come at a time of modest inflows to bond funds generally and signal the difficult task Gross faces as he tries to build a fund at Janus after his abrupt departure from Pacific Investment Management Co. last fall.
Gross co-founded Pimco in 1971 and built the Newport Beach firm over four decades into a global bond powerhouse with assets that at one point topped $2 trillion. His departure for Janus in late September triggered massive outflows of cash from Pimco, but only modest inflows to his new fund at Janus.
Morningstar said the fund's returns slipped 0.26% for the first six months this year, placing it in the bottom half of its peer group.
Jeff Tjornehoj, a senior research analyst at Thomson Reuters' Lipper mutual-fund research firm, said the outflows can be explained mostly by the performance of Gross' new fund.
"Investors expect that after 40 years, he should be able to jump into a new product and get it off to a good start, but we haven't seen that," he said. "That's why assets have been slow to come in."
Janus said the fund's performance from the time that Gross took over Oct. 6 through Thursday was flat, placing it in the top half of its peer group.