In an effort to alleviate investor anxiety, fixed-income guru Bill Gross has taken over daily responsibility of four of Pacific Investment Management Co.’s close-end bond funds.
This is at least the second time this year that Gross has assumed daily responsibility for particular PIMCO funds. In May, he took over some of the firm’s high-yield investments after Mark Hudoff, the previous manager, left to join another firm.
"I think to reassure clients, Bill Gross is saying ‘I’m going to step in and make sure it stays on an even keel,’” said Burton Greenwald, president of Philadelphia-based B.J. Greenwald & Associates.
In an announcement last Wednesday, PIMCO said Gross will oversee the PIMCO Corporate Income Fund, with $814 million in assets under management; PIMCO Corporate Opportunity Fund, with $1.5 billion in assets under management; the PIMCO Floating Rate Income Fund, with $356.4 million in AUM; and the PIMCO Floating Rate Strategy Fund, with $725.40 million in AUM.
Because the funds had issued auction-rate securities, and became ensnared in the ARS market’s meltdown last year, a couple of fixed-income professionals say they think Gross is trying to shore up investor confidence in the funds and in PIMCO.
The company significantly reduced the level of exposure the funds have to the ARS market, but investors have lingering questions about any fund that continues to issue ARS. It is unclear whether PIMCO’s funds still issue ARS.