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Rating:CBS: Gross' Flagship is Engaging in Risky Business Not Rated 1.0 Email Routing List Email & Route  Print Print
Wednesday, September 11, 2013

CBS: Gross' Flagship is Engaging in Risky Business

News summary by MFWire's editors

Bill Gross-watchers in the financial media like to focus on outflows from Pimco [profile] Total Return Fund, but not many writers ask whether the bond fund is safe.

Allan Roth of CBS Moneywatch writes that although the fund is taking on less interest rate risk, it is taking on more default risk. Roth writes that Morningstar doesn't show the average credit quality of the bond fund and it has a "gold" forward-looking rating.

However, Roth says:

"But the Pimco bond fund didn't outperform the Vanguard fund through superior management. It did so by taking on more credit risk and getting compensated for taking on that risk."

In other Gross news, The Wall Street Journal's Min Zeng reports that Pimco's Bill Gross cut U.S. government related holdings in his flagship fund to 35 percent from 39 percent in August. Gross also upped exposure to U.S. mortgage-backed bonds to 36 percent from 35 percent in July, Zeng writes.

Gross' flagship lost 1.07 percent in total return in Augusr from 3 percent in July. Emerging market debt holdings and corporate bonds stayed the same at 6 percent and 9 percent, respectively, Zeng reports.

To read more, click here

Edited by: Casey Quinlan

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