By Kirsten Grind And Dan Fitzpatrick
Investors haven't yet followed Bill Gross en masse to his new
home.
Mr. Gross's new bond fund at Janus Capital Group Inc. took in a
net $66.4 million in September, according to data released
Wednesday from fund research firm Morningstar Inc.
That is a small sliver of the $23.5 billion that poured out of
his former fund, Pimco's Total Return, after his surprise departure
on Sept. 26.
The new fund Mr. Gross manages, the Janus Unconstrained Bond
fund, saw its assets under management swell from about $13 million
at the end of August to $79.1 million, according to
Morningstar.
A spokesman for Janus didn't immediately return a request for
comment.
Launched in May with about $12 million of assets under
management, the Janus Unconstrained Bond fund had seen inflows of
about $800,000 between May and August, according to Morningstar. In
August, the fund saw $80,000 in inflows.
While the September gains represent a more than 500% increase in
the fund's assets in a short period, data suggests that Pimco
competitors thus far might be collecting more of the firm's
outflows.
One of rival BlackRock Inc.'s bond funds took in nearly $1
billion of inflows during September, according to Morningstar,
while TCW Group Inc.'s Metropolitan West Total Return Bond fund saw
$1.5 billion of inflows during the month.
Some Pimco investors say they are hesitant to move money into
Mr. Gross' new fund because it is small and has a different
strategy from the Total Return fund.
Anna Rathbun, director of research at CBIZ Retirement Plan
Services, a Cleveland, Ohio-based consultant to about $8 billion in
401(k) and other retirement plan assets, says that she and her team
didn't consider advising clients to move money to Mr. Gross' new
fund because they haven't had any time to do the research needed to
be able to recommend the fund. What's more, Ms. Rathbun says the
fund is too small--typically she won't consider a new fund unless
it has at least $100 million in assets under management.
"There are so many different layers of due diligence we go
through in order for us to recommend it," Ms. Rathbun says. "There
are too many red flags. It didn't even cross our minds."
Ms. Rathbun says she is advising clients invested with Pimco to
keep their money there for the time being.
The inflows at the Janus fund, while small for now, could
represent a reversal for the Denver-based firm.
Janus has suffered outflows across its mutual funds for four of
the last five years, with investors pulling about $7.7 billion in
2012 and $12 billion in 2013, according to Morningstar. So far this
year through August, the firm had suffered $5.3 billion in
outflows, Morningstar said. The Denver-based firm had total assets
of $177 billion at the end of June, according to the company.
Morningstar didn't yet have data for all Janus funds through
September.
Mr. Gross' inflow into his new fund comes as Pimco continues to
suffer outflows. The Florida State Board of Administration said
Tuesday that it plans to pull more than $2 billion from Pimco, in
part by cutting exposure to the Total Return fund. A Pimco
spokesman didn't immediately respond to a request for comment.
Based in Newport Beach, Calif., Pimco has about $2 trillion of
assets under management and is a unit of Allianz SE.
Some investors haven't yet decided where to put their money. The
director of the Public School & Education Employee Retirement
Systems of Missouri--one of the top 10 holders of Pimco investments
among public pension funds--says his staff pulled $625 million from
the Total Return fund on the Monday following Mr. Gross's
departure.
The $38.2 billion retirement systems had been unhappy with
performance and Mr. Gross's exit "moved it up our priority list,"
said Steve Yoakum, who is executive director of the state plans.
The staff also decided to leave another $600 million with Pimco
that wasn't managed by Mr. Gross.
The Missouri funds haven't yet decided where to put the $625
million pulled from Pimco.
Mr. Yoakum said he hasn't heard from Janus but acknowledged that
"every fixed income manager is out marketing. This is a marketing
opportunity of a lifetime to see this much fixed income money hit
the street."
Write to Kirsten Grind at kirsten.grind@wsj.com and Dan
Fitzpatrick at dan.fitzpatrick@wsj.com
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