U.S. Markets

U.S. investors pull more cash from Bill Gross bond fund: Morningstar

FILE PHOTO: Bill Gross, Portfolio Manager, Janus Capital Group, listens during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 3, 2017. REUTERS/Lucy Nicholson

NEW YORK (Reuters) - Investors yanked $188 million from the Janus Henderson Global Unconstrained Bond Fund, run by billionaire money manager Bill Gross, in June, marking four straight months of withdrawals, Morningstar Inc said on Wednesday.

The Janus bond fund’s performance has stumbled this year, with some share classes down nearly 7 percent and falling to the bottom of their peer ranking, according to Thomson Reuters Lipper research unit.

The $1.5 billion fund stands a third smaller than its $2.2 billion peak earlier this year, with withdrawals for the year totaling $615 million, Morningstar said.

Janus Henderson did not respond to a request for comment.

Earlier this year, Gross conceded to a “bad trade” betting that German and U.S. government bond yields would move closer together, but said he expected to recover those losses.

The unconstrained fund gives Gross wide latitude to invest globally, and he has often positioned for expected interest rate increases. Yields on the safest intermediate bonds have largely fallen since May.

Gross, once considered Wall Street’s “Bond King,” co-founded Newport Beach, California-based Pacific Investment Management Co (PIMCO) in 1971 but left abruptly in 2014 after a management rift and joined Janus.

“Investors who followed Gross to Janus did so remembering his strong long-term record established running PIMCO Total Return,” said Todd Rosenbluth, director of ETF & mutual fund research at CFRA. “However, his record at Janus has placed the fund in the bottom quartile of its Lipper peer group, making it hard to continue to stay loyal.”

Gross is worth $2.5 billion, according to Forbes magazine.

Reporting by Jennifer Ablan and Trevor Hunnicutt; Editing by Diane Craft and Richard Chang