By Ashley Lau and Jennifer Ablan
NEW YORK (Reuters) - Bill Gross's Janus Global Unconstrained Bond Fund
Total net assets in the fund, which Gross took over earlier this week, rose to roughly $79 million at the end of September, a jump from $12.86 million at the end of August. Janus declined to comment on the fund's inflows.
Denver-based Janus Capital Group hired Gross on Sept. 26, the day he announced he was stepping down from his long reign at Pacific Investment Management Company (Pimco). Since then, Pimco has seen heavy outflows, with $23.5 billion leaving the flagship Total Return Fund
While September inflows into the Janus fund were the largest monthly inflow the fund has seen since its inception in May, the fund itself is still relatively young, and the inflows may just reflect early enthusiasm among investors. Janus as a firm added $162.13 million of inflows into its U.S. open-end funds in September.
KBW managing director Robert Lee and analyst Andrew Donnantuono said on Wednesday that the "Bill Gross effect" triggered some late second quarter inflows into BlackRock Inc (N:BLK) and Legg Mason Inc (N:LM) and possibly Federated Investors Inc (N:FII). "Going forward, these firms, as well as Janus, could see better fixed income flows should Pimco suffer outflows in the wake of Gross's departure," they said.
Mac Sykes, an analyst at Gabelli & Co, said the inflows into the Global Unconstrained Bond Fund likely reflect money following Gross to Janus.
"I would venture to say it's directly related to Bill," Sykes said in a telephone interview, adding that the flows figure would be considered strong for any size fund. "Sixty-six million in a few days for anything is pretty good," he said.
Janus' Global Unconstrained Bond Fund is down about 1 percent over the past three months ending Sept. 30, largely underperforming its peers, according to Morningstar. The Janus fund is classified as an unconstrained portfolio with flexibility to invest in all types of bond securities globally and often invest in credit rather than interest-rate sensitive assets.
A popular unconstrained fund, the BlackRock Strategic Income Opportunities, saw more than $1 billion of inflows since Gross' departure through Oct. 3, Morningstar said. Morningstar senior analyst Eric Jacobson said BlackRock is in an "excellent position to benefit from Pimco's pain" and added that unconstrained funds are "all the rage right now, and the BlackRock Strategic Income Opportunities fund has built a very nice record thus far."
As of June 30 Janus had $178 billion under management including $31.4 billion in fixed income products.
Janus shares closed up 0.97 percent to $14.54 on the New York Stock Exchange.
(Additional reporting by Ross Kerber in Boston; Editing by G Crosse and Diane Craft)