Bill Gross regains his footing at Janus Capital

NEW YORK: After a shaky first five months, Bill Gross is regaining his footing at Janus Capital Group, helped by a contrarian bet that the dollar’s rally won't continue.

Gross’s $1.5 billion Janus Global Unconstrained Bond Fund has returned 2.4% in the past month as Treasuries rallied and the dollar gave up gains against the euro. The rebound reversed losses in the first five months and leaves Gross beating 68% of peers since he took over on October 6, including the comparable fund at Pacific Investment Management, the firm that ousted him in September.

Gross said in an interview that he's been betting for several months that the dollar would stop rising and the gap between US and European interest rates would narrow, a trade that hurt performance until markets turned a few weeks ago. His call contrasts with remarks by money managers such as Jeffrey Gundlach, who warned investors not to bet against the dollar. Laurence D Fink, who runs BlackRock, said April 6 that the dollar's strength risks undermining business confidence in the US.

“It's not the trade of the century or the trade of the decade but I think it's the trade of the year,” Gross said. “Patience in the last two to three months has been rewarded.” Janus Unconstrained has gained 1.1% since Gross took over, compared with a return of less than 0.1% for the $9.8 billion Pimco Unconstrained Bond Fund, run by Gross's successor Daniel Ivascyn, Marc Seidner, and Mohsen Fahmi. In the past month, Gross has beaten 99% of comparable funds.

For most investors, one month or even six months is too short a period to evaluate a fund. Institutions such as pensions often require three- or five-year track records before they invest in a new manager. Still, for Gross the rebound is important after his fund in February suffered its first client withdrawals since he took over.