Seeking Alpha

Pimco "stewardship" rating cut by Morningstar

  • “There is a heightened level of uncertainty in the post El-Erian era surrounding the questions of whether Pimco’s latest senior staffing transitions will prove beneficial to investors [and] whether recent and future senior-level departures indicate a persistent side effect of the firm’s pressure-cooker culture," says analyst Eric Jacobsen cutting Pimco's "stewardship" rating to C from B and the "parent pillar score" - which examines manager turnover, investment culture, and fee levels - to Neutral from Positive.
  • It's not automatic, but look for the big-picture rating changes to quickly filter through to the ratings of individual Pimco funds, says Morningstar.
  • Among Pimco's closed-end offerings are PTY, PDI, PMF, PGP, PKO, PFL, PFN, PCN, PCM, PHK, RCS, PMF, PML. There's also the ETF version of Bill Gross' Total Return Fund: BOND.
  • Pimco parent Allianz SE (AZSEY -2%)
From other sites
Comments (21)
  • Dr Joseph Haluska
    , contributor
    Comments (514) | Send Message
     
    My feeling is that PIMCO does better than ever going forward from here.
    "Skating to where the puck is gonna be"
    19 Mar 2014, 12:32 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    I beg to differ, I think we will see some moves and shuffles as the Bill Gross days of local resident tyrant are closing to an end.
    The clock has started ticking with the departure of El Arian who was probably the only pillar of sanity between the huge ego and the high risks undertaken by Pimco in their funds.
    Look for continued redemptions that are bound to hurt funds performance going forward.
    As for some of those high flying CEF's which trade at absurd premiums - we would probably see that premium collapse into a discount to NAV and a good catalyst would be Gross departure or removal to pasture from investment decisions relating to those funds (watch PHK for that, for example).
    19 Mar 2014, 01:11 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    A segment today on CNBC discussing this very issue:
    http://cnb.cx/1pfRRRI

     

    Looks like PHk is already starting to react, long way to go though.
    20 Mar 2014, 03:36 PM Reply Like
  • sandyroy25
    , contributor
    Comments (20) | Send Message
     
    Bill Gross funds have outperformed the market for many decades. His stewardship is still the one I prefer. His ego never struck me as inappropriately large given his success nor did El Arian strike me as the "only pillar of sanity" given that I could never understand his pronouncements.
    19 Mar 2014, 01:52 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    Sandyroy25
    Great, how has he done over the past 1,3,5 years?
    His flagship fund is placed at the 89,47 and 49 percentiles, respectively vs. its peers.
    perhaps you (and him) are still basking in his performance decades ago without noticing he has lost his touch.Considerably?
    To add insult to injury, over the past 3 years this very mediocre performance has been achieved with a degree of risk that is some 30% higher than the fund's peers.
    So yes, great managers, underperformed AND higher risk.
    Stay with him if you'd like but his legacy performance of 10-15 years ago does not apply and has not been replicated over the past 5 years, not by a far margin.
    19 Mar 2014, 03:46 PM Reply Like
  • rbrglv
    , contributor
    Comment (1) | Send Message
     
    Agree
    19 Mar 2014, 04:46 PM Reply Like
  • june1234
    , contributor
    Comments (3376) | Send Message
     
    Think it has more to do with PIMCO's exposure to the bond markets than 2 billionaires having a spat.
    19 Mar 2014, 05:26 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    All his fund's peers have exposure to the bond market yet Gross managed only mediocre returns with HIGHER risks over the past 3 and 5 years and HORRIBLE returns with higher risk over the past 12 months (vs. peers).
    This is about someone with a too big of an ego who forgot that anyone (including him) can make and will make mistakes and has let risk take over with no regard to any control, to the point that the person whom he brought into the firm to be a counterbalance decided to leave.
    At least that is how I understand it from reading the numerous articles about the issue since El Arian left.
    The worst enemy of a portfolio manager's is his ego if/when he has managed to compile a very impressive long term track record.
    19 Mar 2014, 07:06 PM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (514) | Send Message
     
    Thank you, Sandyroy and june1234, for your input. I agree, it hasn't been an easy market, and I don't expect to be in the best 1, 3, and 5 year performers, but with PIMCO, I have done very well, and I'm especially comfortable with PIMCO and Bill Gross. I guess in some eyes I'm just a (successful) loser.
    19 Mar 2014, 07:24 PM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (514) | Send Message
     
    Interesting.http://bloom.bg/1gBgGSX
    19 Mar 2014, 08:03 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    Very
    "Pimco Total Return, which lost its title as the world’s largest mutual fund in October, declined 0.5 percent in the 12 months through yesterday, trailing 80 percent of rivals and underperforming the Barclays U.S. Aggregate Index, according to data compiled by Bloomberg. This year, the fund has advanced 1.9 percent, lagging behind 51 percent of peers."
    19 Mar 2014, 08:18 PM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (514) | Send Message
     
    NYer1, you are very astute.
    I am very interested in closed end bond funds, preferably (but not necessarily) paying dividends monthly. Would you be so kind to give some suggestions as alternatives to PIMCO's funds? I am capable of doing the research, I don't want to sound dependent. But I can see that any suggestion coming from you would certainly be worth consideration.
    Regards.
    19 Mar 2014, 08:56 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    It seems you are very perceptive Dr. Haluska :)
    Judging from your comments so far i wouldn't be surprised if you own PHK for example.
    Try HYT as an alternative
    19 Mar 2014, 10:15 PM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (514) | Send Message
     
    Talk about perceptive, correct, PHK has been a gusher. Admittedly, a somewhat worrisome one. On a quick first look, your suggestion of HYT appears an excellent one, by several parameters. I am not surprised in the least!
    Thank you, and double regards!
    19 Mar 2014, 10:36 PM Reply Like
  • sethmcs
    , contributor
    Comments (3489) | Send Message
     
    Mutiny on the bounty seems to come to mind....Does not project confidence during a transition to potential bear market in bonds.
    19 Mar 2014, 10:23 PM Reply Like
  • justzman
    , contributor
    Comments (11) | Send Message
     
    More non-quantitative social commentary on a business topic, augmented by social and personality comments from readers and subscribers. Sounds like the Democrat Party has wangled its way in.
    20 Mar 2014, 09:36 AM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    Welcome to the club justzman, your comments earn you a membership :)
    Actually the chat above seems quite adroit vis-a-vis the topic subject in question.
    Since you seem to be a Bill Gross fan, how do you explain the last 1,3,AND 5 year poor performance by a so called (not by me) "bond king", "genius" etc.?
    Has he lost his touch? defied risk controls while taking undue mis-calculated risks? did not bail out of losing positions quick enough?
    What is YOUR opinion? or are you simply content to waive the "last 20 years (before the last 5 years) flag and assume things would be better because , well, its Bill Gross (is that quantitative, non social non personal analysis in your view?)?
    20 Mar 2014, 11:17 AM Reply Like
  • justzman
    , contributor
    Comments (11) | Send Message
     
    Well, Seeking Alpha is an investment website. The posts here are largely personality and behavior criiticisms of PIMCO and Bill Gross by people who a) have an axe to grind, and/or b) need an outlet for their criticisms so they can achieve some kind of recognition as investment "gurus".

     

    What purpose is served by this pack attack mentality? Don't like PIMCO? Move your money elsewhere. Be stealthy and silent about it. Or, if one wants to be a "guru", post one's advice on Seeking Alpha's pages. Then wait a year - or less - for the NY'ers to try to rip you a new one on Seeking Alpha. Prepare for the zings and QUESTIONS to try to ferret out your monetary ideas, and to get you into a public argument on Seeking Alpha. Because, after all, they're NY'ers. That's what they do.
    21 Mar 2014, 11:17 AM Reply Like
  • justzman
    , contributor
    Comments (11) | Send Message
     
    It's not a discussion, it's postings on a website that are often done with the intent of making an impression on readers.

     

    Now you, who doesn't know me from Adam, is trying to tell me on a web post to venture outside of my narrow minded existence? That's the kind of stuff that makes people think of NY'ers as aggressive, reactive, and ill-tempered.

     

    Which is one of the several reasons I moved out of NY after 50 years of having to constantly kick people's butts. Capisce?
    21 Mar 2014, 04:40 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    Justzman..tsk tsk..antsy are we?
    It's ok, not everyone can make it here..chill out and mellow some, after all you don't live here anymore..:)
    I stand by my impression of you as narrow minded though, you seem to be very focused only on your point of view and attacking others (without providing anything to back your own position ). After all, you seem to be conversing with me and others on this site, while denigrating a host of people you don't know either..can you walk the walk? or do you just talk the talk?
    I mentioned facts in my comments, alluded to published reports - what are you basing your comments on?
    Let's hear your ideas as to why Gross' fund has underperformed for the past 1,3,5 years AND did that with much higher risks..indulge us all if you care..:)
    .
    I don't know what part of NY YOU used to live in but where I walk around (including the subway BTW) I see NYer's as very helpful, perceptive and courteous, perhaps you didn't fit in and decided to leave?
    21 Mar 2014, 05:24 PM Reply Like
  • NYer1
    , contributor
    Comments (1781) | Send Message
     
    And they keep coming: a FT article about the Pimco leadership issue

     

    http://on.ft.com/1r1ee14

     

    Might be responsible to the drubbing some of the high premium Pimco CEF's got hit with today (look at PHK, PTY,PCN,) on double than usual daily volume.
    20 Mar 2014, 04:45 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs