Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), speaks at the Morningstar Investment Conference in Chicago, Illinois, June 19, 2014.
Jim Young—Reuters
By Ian Salisbury
September 24, 2015

Another knock on the Great Man theory of investing.

It’s been a full year since one of the investment world’s biggest stars, “bond king” Bill Gross, departed from Pimco, the firm he founded nearly half a century ago, and set up shop with a rival. As noted today by the Financial Times (subscription required), it appears that during that year, Pimco did much better without Gross than Gross did without Pimco.

Gross’s defection to Denver-based Janus Capital came after controversy surrounding Gross’s brash management style, but still caught many fund watchers by surprise. In an investing world increasingly dominated by faceless index funds, Gross—known as much for his quirky personality as for his fearsome investing prowess—was one of the few real stars.

Pimco investors reacted to the move by yanking more than $120 billion from Gross’s flagship Pimco Total Return fund (PTTCX). According to the FT, however, only about $1 billion of that money followed Gross to his new vehicle, the Janus Unconstrained Bond Fund (JUCCX).

So how have the two fared over the past year? Pimco Total Return, now overseen by a much-less-high-profile trio of managers, has delivered investors a gain of 1.7%, while Gross’s new fund is actually in the red, down 2.5%.

Of course, one year is far too short a time to draw firm conclusions about investment performance. But both Pimco and Gross, who had touted the advantages of a smaller, nimbler investment portfolio, had to be hoping hard for some strong early returns, if only for vindication.

The FT concludes: “By underperforming, Mr Gross may be inadvertently helping Pimco make its own case: that the investment process, trading infrastructure and intellectual firepower across the asset management group count for as much, if not more, than any one individual’s investing talent.”

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