01/12/2010
Bill Gross
When it comes to bonds, nobody does it better than Bill Gross.
The renowned bond fund manager has been named “Fixed-Income Manager of the Decade” by mutual fund ratings and research firm Morningstar for steering the PIMCO Total Return Fund—a mutual fund he has managed since its inception in 1987—through both bull and bear markets and periods marked by fluctuating interest rates and extreme volatility.
“It’s a great honor—both individually and for the firm,” says Brian Gaffney, chief executive officer at Allianz Global Investors Distributors. “The Morningstar award recognizes Bill Gross as one of our industry’s best portfolio managers and brightest investment minds and reflects Allianz Global Investors’ deep commitment to strong investment performance as well as providing value for fund shareholders.”
It is clear from his investment calls and outstanding performance that “Gross is one of the best investors of our era,” says Karen Dolan, director of fund analysis at Morningstar. “[He] has stayed ahead of the competition throughout the decade by making the right calls at the right times.”
For example, despite the havoc mortgages created in the market, bonds backed by mortgages have been one of the fund's largest sources of excess return, Dolan says. Other good calls include yield-curve bets and plays on emerging markets and corporate and foreign bonds. In 2006, Gross was betting against the dollar and was vindicated when the dollar declined versus other currencies, she adds.
Gross, co-chief investment officer and managing director at PIMCO, is the first recipient of the inaugural award. Morningstar has long recognized individual portfolio managers for their risk-adjusted performance on an annual basis but this is the first time the Chicago-based fund tracker has bestowed the honor for an excellent 10-year track record.
His prowess as a portfolio manager is most evident in the numbers he’s put up. Indeed, PIMCO Total Return boasts a 7.15% return over the 10-year period ending Dec. 31, 2009, ranking it in the top 10 in its peer group and outpacing its benchmark, the Barclays Capital U.S. Aggregate Index, nine out of the last 10 years.
Still, historical performance is no guarantee of future results. The award is intended to acknowledge managers' past achievements more so than serve as a forward-looking recommendation, according to Morningstar.
Average Annual Total Returns as of 12/31/09
(Fund inception 5/11/87**)
| |
1-yr |
3-yr |
5-yr |
10-yr |
**Inception |
| PIMCO Total Return A at NAV |
13.33% |
8.68% |
6.35% |
7.15% |
7.93% |
| PIMCO Total Return A at MOP |
9.08% |
7.30% |
5.54% |
6.74% |
7.71% |
| Lipper Int. Investment Grade Debt Fund Avg. |
12.89% |
4.60% |
3.90% |
5.51% |
6.84% |
| Barclays Capital U.S. Aggregate Index |
5.93% |
6.04% |
4.97% |
6.33% |
7.34% |
Performance quoted represents past performance. Past performance is no guarantee of future results. Current performance may be lower or higher than average annual returns shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. MOP returns take into account the Class A maximum initial sales charge of 3.75%. As-of 12/31/09 the Fund’s expense ratio is 1.08%.
However, it’s not just about returns. The award takes into account the risks assumed to achieve those results, the strength of the manager, the quality of the strategy and the firm’s stewardship.
Known for his keen macroeconomic insights, Gross uses a secular view of the markets and the economy as guardrails for the fund’s security selection, blending them with the firm’s bottom-up bond research. (Read his latest investment outlook). His ability to adjust the fund’s yield curve positioning and sector weightings ahead of market shifts has rewarded investors over the past decade.
For more than 20 years, PIMCO Total Return has delivered strong long-term results across a wide range of interest rate environments—rising rates, falling rates and full market cycles. Through it all, the fund has remained a core bond choice for millions of investors by focusing on high-quality fixed-income securities, and by sticking to PIMCO’s total return philosophy and proven risk-management discipline.
During rising rate periods, bonds and bond funds generally decrease in value. But in the four rising rate cycles since the fund’s inception, its historical returns have been positive (or only briefly negative). Over full calendar-year periods before and after these rising-rate cycles, the fund and its benchmark performed even better.
PIMCO is a subsidiary of Allianz Global Investors whose investment management team is widely recognized as a leading global investment authority. PIMCO Funds and Allianz Funds are distributed exclusively by Allianz Global Investors Distributors, which helps financial advisors tap into PIMCO’s intellectual capital and educates advisors on how to use its investment perspectives to construct client portfolios.
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