The person who could hold Gross accountable is Dick Weil, who brought Gross to Janus Henderson Group and is the company’s sole chief executive officer. So far, he’s been patient. In August, during a Bloomberg TV interview, he said the “underperformance we’re seeing is challenging and disappointing to him more than any of us” and “it’ll take some time to dig his way out.”
Others are less forgiving — another sign of Gross’s diminished stature in the markets. Here’s what Randy Waesche, chief executive of Resource Management, a U.S. financial adviser, recently told the Financial Times:
“At some point in all managers’ careers, they must realize they are not great any more. Alternatively, someone must tell them so. This has not been the case with Bill Gross or Janus Henderson.”
Global Unconstrained can’t be viewed like an ordinary fund, however. For the most part, the only person suffering from Gross’s bad decisions is Gross himself. And because of that, he has a lot of leeway to do what he wants. He still employs a negative duration, for one thing, though it’s a much more reasonable minus 1.09 years, compared with minus 3.67 years as of Sept. 30.
It’s possible the worst is over for Gross. The fund’s share price is on a modest two-month upswing, which is the first time that’s happened since mid-2017. Maybe the digging-out process has just begun.
No matter what happens, though, it’s important to see Global Unconstrained for what it is, put in stark relief by its fall below $1 billion. It’s not so much a bond fund for outside investors anymore. It’s morphed into Gross’s own personal investment vehicle; a way for him to prove he’s still the “Secretariat” of the markets.
Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.