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Beyond BOND: Negligible ETF Fallout After Gross Departure


The big news out of the world of exchange traded funds Friday is Bill Gross’ departure from PIMCO, the bond house he founded and served as chief investment officer at. That means he will no long be managing the PIMCO Total Return ETF (BOND) , the second-largest actively managed ETF.

Earlier today, it was revealed that Gross, formerly a PIMCO managing director and chief investment, is leaving the firm to join Janus Capital (JNS). Gross “will manage a recently launched Janus Global Unconstrained Bond Fund and related strategies, and will join Myron Scholes, Ph.D., and other members of the Janus team focused on global asset allocation,” according to a statement issued by Denver-based Janus.

The news sent shares of Janus (JNS) higher by as much as 40% and the stock is trading 33.1% higher at this writing on volume that is already nearly 39 times the daily average. However, Janus’ big surge is only having a modest impact on ETFs because the company is not a marquee holding in many ETFs.

According to S&P Capital IQ data, only the WisdomTree U.S. SmallCap Dividend Growth Fund (DGRS) features Janus as a top-10 holding, but with a weight of just 1.5%.

DGRS is trading higher by 0.4% today. [Small-Cap Dividend ETFs are Less Bad]

The PowerShares KBW Capital Markets Portfolio (KBWC) sports a 2.93% weigh to Janus, making the stock the ETF’s the 18 th -largest holding. KBWC has yet to trade today.

“BOND volume today to quote Will Ferrell in the movie ‘Elf’ is ginormous,” said Street One Financial Vice President Paul Weisbruch in an email exchange with ETF Trends. “But seriously, the fund has traded 2.7 million shares already before 11:30 AM EST time on ADV of about 204,000 shares. It is hard to say if it is all sellers, but this morning the fund did briefly trade at exaggerated low levels for some time (intraday low of $108.53) before bouncing to current levels on some nibbling. The fund has not traded volume levels like this since early 2013, and watching the net flows in coming days will be telling, in terms of sensing how much and where current PIMCO BOND investors may be going on the ‘Gross leaving’ headline.” [BOND ETF Steady Despite Gross News]

Pleasant surprises come by way of the not-so-bad performances being turned in by Germany ETFs. German insurance giant Allianz, the parent company of PIMCO, slumped 6.2% in European trading on volume that was more than five times the daily average, leading Germany’s benchmark DAX lower.

However, the iShares MSCI Germany ETF (EWG) , the largest U.S.-listed Germany ETF, is off just a third of a percent despite an almost 7% weight to Allianz.

The Deutsche X-trackers MSCI Germany Hedged Equity Fund (DBGR) also features an almost 7% weight to Allianz, but that ETF is trading modestly higher. DBGR’s rival, the WisdomTree Germany Hedged Equity Fund (DXGE) , features a 6.7% weight to Allianz making the stock that ETF’s largest holding. DXGE is, however, trading slightly higher as well.

Deutsche X-trackers MSCI Germany Hedged Equity ETF


ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.