Bill Gross - It Doesn't Get More Fundamental Than This

[Pat Riley]

Pimco until last September had held the largest bond fund title for a couple of decades. Since then it's gone from $230bn down to $110bn under management. Vanguard is now (only just) #1 with $117bn under management.

Bill stuck around $700m of his own cash into Janus on taking up his position there, but there hasn't been the anticipated matched flow of redemptions from Pimco finding the same target. Nor over to Vanguard. While bonds dwarf everything else I'm gettin a sense that those outflows haven't necessarily found alternative bond homes ta go to, Apart from Pimco's obviously woefully poor gating specifications, I'm interested to hear your hypotheses on what those Pimco bondies might have done with their redeemed capital.

All ideas invited and welcomed.

 

[Pat Riley]

I'm beginning to get a sense that what interests me may not necessarily interest the rest of ya. LOL

Well, what interests me right now is getting on out for a night of fun after a long, tough day.

The reason I asked the question in post #1 was that I get plenty of sell-side research comin my way and top quality it is too. But it intrigued me to wonder if consensus among those from what is I am presuming predominantly the retail side would have a different perspective or an interesting angle or two.

And then I'm thinkin, why would they be interested in that sort of stuff? It would be about as sensible as askin me what levels I'd play cable off tomorrow. Then I got to thinkin, well, ya could ask me that and even though it's an entire different world about which I know next ta nothing, I'd be tangentially interested enough to have a look, and have a go at it.

But I'm guessing that's because I've got more time on me hands than the rest or maybe something else.

Anyhow, you all have a good one.

 

[Jack o'Clubs]

Interesting... If you're linking it to recent bond market wobbles, spreads were still tightening through the worst of the outflows so I don't think it's related to that. Nor is there much evidence of the start of the great rotation. So I would guess most of it has been recycled into smaller nimbler funds.

Systemically more interesting is what happens to the big HY ETFs in a bond rout, given the illiquidity of the underlings...

 

[Pat Riley]

Interesting... If you're linking it to recent bond market wobbles, spreads were still tightening through the worst of the outflows so I don't think it's related to that. Nor is there much evidence of the start of the great rotation. So I would guess most of it has been recycled into smaller nimbler funds.

I wasn't. But given the impact low to -ve yields are havin on that market, I wouldn't necessarily agree with your last sentence. None of the empirical sell-side research suggests much of it at all has headed into the smaller funds. I let the thread stew a while ta see what else anyone has before I let ya know where we think it's mostly gone.

ISystemically more interesting is what happens to the big HY ETFs in a bond rout, given the illiquidity of the underlings...

We're gettin to a place where any bond paying a +ve yield is possibly going ta have to be qualified as junk. As to systemic implications, shareholders typically take the hit in the publics, investors in the funds and the taxpayer in the banks. Plus ca change.

 

[Jack o'Clubs]

From what I hear (and see) a lot of FI money has gone into bond proxy equities - stuff like utilities, staples. Anything with a yield and forget the valuation.