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Merian brings bond fund outsourced to Bill Gross in-house

Merian Global Investors has insourced the Total Return USD Bond fund previously run by Janus Henderson star manager Bill Gross, who retired from fund management in March.

The $195.5m (€225.8m) fund, which will be rebranded as the Global Dynamic Bond fund, will now be run by Mark Nash and Nick Wall.

Its objective to maximise total return remains unchanged but its remit will become more global, albeit with 80% of assets to remain denominated in US dollars, and it will invest in a wider range of assets, including high yield, contingent convertible bonds and collective investment schemes.

The benchmark will also change from the Barclays Capital US Aggregate Bond Index to the Bloomberg Barclays Global Aggregate Index (USD hedged).

Merian said the decision was not prompted by Gross’s exit from Janus Henderson, which was announced in February. Instead, a spokesperson told sister publication Portfolio Adviser the decision was prompted by a regular review of its fund range “for opportunities to improve investor outcomes” pointing to the refreshed approach being in the best interest of investors.

The Ireland-domiciled fund launched in April 2002 and was initially outsourced to Pimco, with Bill Gross as fund manager. For a short period following his 2014 exit from the Californian fund house he helped found, the fund was managed by the remaining team at Pimco. The fund transitioned to Janus Henderson in July 2015.

Expanded bond universe

Merian said in a press release that the fund would become more flexible under the changes.

“With the recent change in the policy direction of developed market central banks having a profound impact on fixed income markets, we believe now is an opportune time to expand the investment universe and flexibility of this fund,” said Nash.

The US Federal Reserve indicated in January that there would be no further rate rises for the remainder of the year.

The Merian fixed income team takes a top-down view that it then populates with best ideas from its sector specialists. It stated that it uses a stringent risk budgeting technique to spread risk across positions.

The fund is for sale across Europe, including: Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland.

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Jessica Tasman-Jones

Jessica Tasman-Jones is news editor at Portfolio Adviser and covers fund selection, asset allocation and portfolio construction for intermediaries, as well as industry news and regulation. Previously she...

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