Beating Gross

Over the past 10 years, Fuss’s Loomis Sayles Bond Fund has advanced at at an average annual rate of 8.6 percent, compared with 6.2 percent for Gross’s flagship fund.

Over the past 20 years through Aug. 31, Fuss’s fund climbed at an annual pace of 9.1 percent, compared with Gross’s 6.8 percent, according to Chicago-based research firm Morningstar Inc. The Loomis Sayles Bond Fund even beat the Standard & Poor’s 500 Index of U.S. stocks, which rose 8.6 percent in that period.

The Loomis Sayles Bond Fund, the Natixis fund and a third fund run by Fuss, the $1.2 billion Loomis Sayles Fixed Income Fund, were the top performing multisector bond funds over the past decade, according to Morningstar.

Fuss’s strong historical results have come with stumbles along the way. The Loomis Sayles Bond Fund lost 22 percent in 2008, worse than 96 percent of peers, and 4.9 percent in the third quarter of 2011, when investors deserted riskier investments over concerns about the European debt crisis. The fund had higher volatility than all but three of the 65 large funds over the past decade, according to data compiled by Bloomberg.

‘Lumpier Ride’

“With Dan you get a lumpier ride, but over the long haul that volatility has paid off handsomely,” Jeff Tjornehoj, an analyst with Denver-based Lipper, said in a telephone interview.

The volatility might explain why Fuss’s funds have lagged behind rivals in attracting assets. Investors pulled money from Loomis Sayles Bond and Natixis Strategic Income in the three years ended Dec. 31, data from Morningstar show. Gross’s $251 billion Pimco Total Return Bond Fund won more than $35 billion in deposits over the same period, even as he failed to match Fuss’ returns.

Elaine Stokes, who, along with Matthew Eagan, serves as co- manager on all of Fuss’ funds, said because the funds don’t fit neatly into any box, they don’t always make the lists of recommended investments.

“We spend zero dollars advertising the funds and are quite happy to have them grow at a steady pace,” she wrote in an e- mail.