‘Facing Challenges’

The moves reflect the struggle active stock and bond pickers face in today’s marketplace, said Todd Rosenbluth, director of exchange-traded fund and mutual fund research at S&P Global Market Intelligence.

“Asset managers with a significant base of business from active funds are facing challenges from the trend toward passive ETFs,” Rosenbluth said. “While collectively fixed-income mutual funds continue to gather new money, Pimco’s funds have experienced significant outflows in 2015 and the redemptions have continued in 2016.”

Pimco reported about 2,300 total employees at the end of the first quarter, down 4 percent from 2,400 a year earlier. The firm reduced the number of investment professionals by about 5 percent to 720, according to its website. Other money managers, including BlackRock Inc. and Franklin Resources Inc., have also been cutting staff this year as they compete with low-fee competitors such as Vanguard Group.

Gross, who now manages the $1.4 billion Janus Global Unconstrained Bond Fund, has sued Pimco for “hundreds of millions of dollars,” claiming he was ousted by a “cabal” of managers who wanted a larger share of the firm’s bonuses. Pimco has denied the allegations and contends in a response to the lawsuit that Gross abandoned the firm, leaving behind a last-minute handwritten note of resignation.

“Mr. Gross ended his career at Pimco with no notice or transition, disregarding the potential impact on the individual and institutional clients whose assets he was responsible for managing,” the firm said in an April court filing.

Assets fell to $86 billion in May from a 2013 peak of $293 billion at the Pimco Total Return Fund. Other funds that have been bleeding assets include the Pimco Emerging Local Bond Fund and the Pimco Unconstrained Bond Fund.

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