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Bill Gross’s New Fund Sees Massive Inflows and Today’s Other Top Stories

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Bill Gross is not past his sell-by date just yet, with investors still prepared to back the septuagenarian fund manager.

Investment into his new Janus Global Unconstrained Bond fund increased by $770 million during November, pushing the fund past $1 billion of assets under management, according to data released Monday by research firm Morningstar Inc.

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The inflows come on top of the $500 million invested with Gross by George Soros’s Quantum Partners LP, and represents the highest pace of monthly inflows since Gross took over the fund after his Sept. 26 departure from Pacific Investment Management Co., the money management firm he co-founded.

Since Gross came on board at Janus, the Janus Global Unconstrained Bond fund has swelled from about $12 million in assets under management to $1.2 billion at the end of November, according to Morningstar.

Still, the amount of money flowing into Mr. Gross’s new fund is just a fraction of the amount leaving Pimco. The Newport Beach, Calif.-based firm has seen about $60 billion in investor outflows between September and November just in Mr. Gross’s former flagship fund, the Pimco Total Return fund. Pimco competitors such as BlackRock Inc. and Vanguard Group appear to have captured far more of the outflows.

 

Todays Other Top Stories

Learn Bonds

Learn Bonds: – Expect near-zero interest rates in 2015. – As the economy looks for a way to bounce back, plans to keep interest rates close to zero through the rest of the year by the Federal Reserve may have to be scrapped. It appears that extending low interest rates in 2015 may not happen, which for bank investors is incredibly bad news.

 

Municipal Bonds

Reuters: – U.S. muni market expecting second week of high volume issuance. – The U.S. municipal bond market will enjoy a surge of debt from issuers next week, marking a second consecutive week of large volumes.

Reuters: – U.S. muni market expecting second week of high volume issuance. –  The U.S. municipal bond market will enjoy a surge of debt from issuers next week, marking a second consecutive week of large volumes.

Bloomberg: – Muni sales poised to decelerate while redemptions rise. – Municipal bond sales in the U.S. are set to decrease in the next month while the amount of redemptions and maturing debt rises.

Kevin Ariedge: – Juice up your annual retirement income with municipal bonds. – Even a dividend growth fanatic can appreciate the steady income afforded by municipal bonds.

 

Bond Market

Barron’s: – Bond benchmark could be losing its relevance for funds. – When it comes to beating a benchmark, U.S. bond-fund managers have been looking smarter than their stock peers. Nearly 60% of taxable-bond managers beat the Barclays U.S. Aggregate Index in the past three years, triple the percentage of U.S. equity managers who beat the Standard & Poor’s 500.

Salt Lake Tribune: – 2015 bond outlook: Low expectations. – Don’t expect much from your bond mutual fund next year. The bond market will likely produce modest returns, if they’re positive at all, according to many bond-fund managers. It’s a matter of math: Bonds are offering very low interest rates following a decades-long drop in yields. That means they’re producing less income.

Tabb Forum: – Electronic evolution: Corporate bond trading 3.0. – As corporate bond dealers shrink their balance sheets and inventories, the principal-based model and the efficiency of the request-for-quote protocol, which has dominated the market since the invention of the telephone in 1876, have begun to deteriorate. Today, multiple trading protocols are required to effectively trade in and out of risk positions.

Bloomberg: – One hundred years of bond history means bears fated to lose. – If you’re convinced the plummet in yields of U.S. government bondsis an aberration, it may be because you haven’t been in the business long enough.

 

Treasury Bonds

Barron’s: – Two-year note yield takes off. – A strong jobs report lifted bond yields, with Treasury’s two-year note at the center of the action. Also: higher yields in energy junk bonds.

 

Investment Grade

FT: – Bears tighten their grip as one-way bets disappear. – (Subscription) Corporate bond yields rise as clouds descend on equity markets.

Morningstar: – Robust liquidity returns to corporate bond market. – Following the Thanksgiving holiday, robust two-way flows returned as the buyers who had been missing from the marketplace showed up. Liquidity improved significantly across the market, although one trader noted that it was still difficult to move 30-year off-the-run bonds.

 

High Yield Bonds

Forbes: – JNK crosses critical technical indicator. – In trading on Friday, shares of the SPDR Barclays High Yield Bond ETF entered into oversold territory, changing hands as low as $39.06 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

FT: – Fall in oil price threatens high-yield bonds. – (Subscription) Tumbling crude oil prices are threatening to destabilise the US high-yield bond market, which has provided billions of dollars to finance the North American shale energy revolution.

Business Insider: – Let’s take a closer look at these energy junk bonds everyone’s freaking out about. – Because the energy sector is a large component of the U.S. high yield market relative to some other asset classes, the market has received increased scrutiny due to recent declines in oil prices. However, the sub-sectors that are most sensitive to commodity prices.

Income Investing: – Junk bonds will only return 4.5% in 2015 – Citi. Citi strategists are out with a pretty bearish 2015 outlook for high-yield bonds and leveraged loans, saying total returns next year will add up to just 4.5% for junk bonds and 3% for loans.

 

Emerging Markets

Barron’s: – Emerging market debt, China credit, is risky, UBS panel says. – Investors and strategists assembled at a recent UBS Wealth Management forum concluded that emerging debt markets pose significant risk.

Deal Book: – Dollar’s rise hurts investments in emerging market bonds. – The relentless rise of the dollar has made betting on emerging market bonds increasingly unattractive for yield-hungry global investors.

FT: – The emerging problem of foreign currency debt. – (Subscription) It is not so long ago that many emerging economies, especially those in Latin America, were complaining bitterly about “currency wars”. A decade-long commodity price boom, combined with ultra-loose western monetary policy, flooded the emerging world with capital and pushed up exchange rates to wildly overvalued levels. But those days are over.

 

Investment Strategy

ETF Trends: – Bond ETFs for cost-conscious investors. – The November jobs report, revealed Friday, stoked speculation that the Federal Reserve is on pace to raise interest rates in the first half of 2015.

Paul Novell: – A trend following bond portfolio for any environment. – Gary Antonacci’s book Dual Momentum, mentions applying a momentum approach exclusively to bonds as part of his GBM portfolio. Let’s see how that works.

Pensions and Investments: – Managers shifting to new reality of fixed income. – The fixed-income trading desks of larger money managers are setting prices of trades instead of discovering them while applying the electronic trading skills of their equity brethren to adapt to the changing nature of the secondary bond markets at a time of lower liquidity.

Business Insider: – You’d be surprised how many investors can benefit from bonds. – Bonds can play an important role in managing portfolio risk, even if you have a long investment time horizon.

WSJ: – Get your bonds ready for a Fed rate boost. – (Subscription) With so much uncertainty facing the market, investors are better off diversifying their bond portfolio to shield it from the multiple things that could go wrong, bond professionals say.

 

Bond Funds

ETF Daily News: – Krane shares launches niche China bond ETF. – Emerging market bonds have been gaining immense popularity in recent months as central banks around the world are following loose policies in contrast to the U.S. Out of the emerging market debts, the China bond market is growing rapidly and has grabbed investors’ interest lately.

MarketWatch: – Why many bond funds are as volatile as stocks. – When stocks tumble, bonds are supposed to salvage your portfolio’s performance. But it turns out that many bond funds behave suspiciously like stocks.

Think Advisor: – PIMCO Total Return loses $9.7B in assets in November. – The flagship PIMCO Total Return Fund, formerly managed by Bill Gross, had estimated net outflows of $9.7 billion, or nearly 6%, in November 2014, according to Morningstar. Its assets were roughly $171 billion vs. $163 billion in October.

Tulsa World: – Investing: how a rate hike would affect bond funds. – How would the bond funds in the Kiplinger 25, our list of favorite no-load mutual funds, perform if the Federal Reserve were to raise interest rates by a full percentage point over the coming year?

Zacks: – 5 Zacks #1 Ranked balanced funds to buy now. – Balanced funds provide investors with the convenience of buying into a single fund rather than holding both equity and bond funds. Here we will share with you 5 top rated balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future.

 

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