The Best Way to Invest with “Bond King” Bill Gross

Page 1 of 2

Some might say Bill Gross is the greatest bond manager in the world.

The co-founder of one of the world’s largest investment firms, Pacific Investment Management (PIMCO), has a reputation that was built upon an impressive string of gains through PIMCO’s flagship fund, the PIMCO Total Return Instl (MUTF:PTTRX). The world’s largest bond fund, with net assets of $281 billion, has performed especially well since the financial implosion of 2008, producing huge gains as investors shifted away from equities and fled to the safety of fixed-income assets.

Some New ETFs Could be Stars in 2013

But in spite of this incredible success, Gross isn’t kicking back and resting on his laurels. In fact, he just released a brand new investment that directly competes with his highly successful Total Return mutual fund.

If this sounds like product cannibalization, then you’re exactly right.

The bond investor is borrowing a page from the Steve Jobs playbook: Stay paranoid about your competition and constantly find new ways to innovate your products and space. The Total Return manager recognized that in a world of growing financial innovation, he would have to cannibalize his own business or one of his competitors would.

So with that in mind, Gross created the PIMCO ETF Trust (NYSEARCA:BOND), an exchange-traded fund (ETF) that went public in March and replicates Total Return’s performance. This is great news for investors, because this new ETF offers the best of both worlds: Exposure to the Total Return fund and loads of financial innovation.

For starters, BOND provides investors with the additional transparency that is unavailable through its mutual fund counterpart. That’s because actively-managed ETFs are required to disclose their portfolio holdings on a daily basis, providing investors with much more insight into short-term fluctuations and additional insight into PIMCO’s long-term outlook.

Beyond transparency, BOND is also a great bargain, with an expense ratio of 0.55% — well below the 0.90% charged for the Total Return A shares available to regular investors. It is also only a pinch more expensive than the 0.46% charged to the most powerful financial institutions in the world for Total Return’s institutional class shares. Speaking of institutional class shares, not only are regular investors restricted from buying them, but even if they could, then they would need a minimum investment of $1 million, which would make it extremely unaffordable to most people. Even the fund’s common shares require a minimum $1,000 investment. BOND’s “no minimum” investment makes it that more attractive. BOND also enables investors to avoid paying the 3.75% front load that buying shares of the Total Return mutual fund requires.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Least Expensive Cities in the World

Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!