Here’s Why Pimco Hates the Fed’s Taper
Pacific Investment Management Co. (NASDAQ:PTTRX), better known as Pimco, had a rough time of it in the wake of the Federal Reserve’s $10 billion taper of its bond-buying plan. Pimco’s money manager, Bill Gross, is to blame for the mistaken estimation of the fallout of the Fed change. Unfortunately, its funds have not been competitive in 2013 — an unusual turn of events for the usually quite successful Gross.
Two of Pimco’s eleven biggest funds did fine, but the other nine did not beat over half of their competitors in 2013. “When you take a strand, you heighten the business risk when you are wrong,” Joshua Emanuel, investor with Elements Financial Group LLC, told Bloomberg. Gross, who is now sixty-nine, became a big name as the fixed income manager for Pimco, with a net worth of $2 billion.
Sadly, this year poor bets resulted in a slight marring of his name. The Chief Operating Officer of Pimco, Douglas Hodge, told Bloomberg that the taper was a “five letter word” and that longer-dated bonds “cost us.” Gross isn’t alone in having a rough year however. According to Bloomberg, Valley Forge (NASDAQ:VAFGX), and Western Asset Management Co. (NYSE:WMC) both made big investments choices this year.