William H. Gross — The King

“If Any One Man has put Bonds on the Map, it's Bill”

William H. Gross

William H. Gross

Bill Gross is widely recognized as the King of Bonds due to his ability to outperform the major bond indices, in all markets. His talent has become legendary. He is certainly the highest paid fund manager in the world, which is hardly surprising when you consider that he manages America's largest bond fund ($128 billion in assets, June 2008) and under his lead it consistently chalks up outstanding results. (Up 7.75% p.a. since he took the helm in '87.) When it comes to navigating turbulent seas, Bill has few rivals. He can make money as readily in bull markets as in bear with impeccable judgment and an unerring eye. Some say he can even walk on water.

His secret? For a start, Bill is more aggressive than most bond managers. In his own words: "I've always said that a good institutional bond manager has to be one-third mathematician, one-third horse trader, and one-third economist." Most likely it is simply his passion to beat the odds.

Born in Middletown, Ohio, he was raised there and California and as a young man, while recovering from an auto accident in Duke Hospital (NC), he read a book on beating the odds in gambling and discovered his true calling. He promptly headed to Las Vegas where he generated the money he needed to attend business school. Vegas taught Bill that with new ideas, patience and hard work he could beat the system! He has never looked back.

Bill gained a BA in psychology at Duke University, Durham (NC) in 1966 and an MBA at UCLA in 1971 before founding Pacific Investment Management Co, LLC. From Bill's point of view there's no difference between gambling and money management. "The goal is to spread risk and avoid becoming emotional while staying focused on the odds." His investment philosophy is no secret at all.

Bill respects secular trends rather than short-term interest rate movements, using diversity to temper risks, and aims for performance consistency by avoiding extreme swings in either maturity or duration. He relies more on interest rate and sector bets than individual bond selection. From this position he aims to beat the market. And he succeeds. He also aims to provide clients with the highest standard of excellence in asset management, emphasizing service, value, stability and vision. His own genius and PIMCO's huge analysis resource base help him get both of these right more often than not.

Today, Bill practices yoga, writes about investing (2 books and numerous newsletters and articles) and always believes in bonds. William H. Gross is founder and chief investment officer with Pacific Investment Management Company. ($829 billion assets under management - June 2008) In 1993 he was recognized as the most influential authority on the bond market in the United States. Gross and his team have three times been awarded Morningstar's "Fixed-Income Manager of the Year" award (1998, 2000, and 2007).

Bill is a Chartered Financial Analyst and a member of the Los Angeles Society of Financial Analysts.

Bill Gross' Scorecard

These five criteria contribute to the selection process which helped us to choose Bill Gross as one of our select group of Money Masters.

1 Manager Tenure Check!
2 Performance Results Check!
3 Style Consistency Check!
4 Regulatory Compliance Check!
5 Availability Check!

The fund we are investing in to gain access to Money Master Bill Gross is:

Fund Name:PIMCO Total Return
Fund Symbol:PTRAX
Fund Summary:

PIMCO Total Return fund invests in a diversified portfolio of fixed income securities - normally for 3-5 years - utilizing interest rate volatility, yield curve movements, and credit trends. Taken together, these sessions set the basic portfolio parameters, including duration, yield-curve positioning, sector weightings and credit quality. Bottom-up strategies, including credit analysis, quantitative research and individual issue selection, are then meshed with the top-down strategies to add value. We may at times use futures to replicate bond positions The fund may invest all assets in derivative instruments and up to 20% of fund assets may be invested in securities denominated in foreign currencies.

Pacific Investment Management Company LLC (PIMCO)
  • More than 1,000 employees including 258 investment professionals.
  • Founded in 1971 and based in Newport Beach, California.
  • PIMCO is one of the world's leading fixed-income fund-management companies with more than $829 billion of assets under management; led by William Gross, noted bond manager.
  • Clients include more than half of the 100 largest U.S. corporations
  • Includes America's largest bond fund, PIMCO Total Return Fund, with $128 billion AUM as of June 30, 2008.
  • The company is majority owned by Munich-based Allianz Group, a leading global insurance company with over $1 trillion in assets and represented in 70 countries around the globe.

* Notes: The 10-year average return shown for PTRAX is for the 10-year period 01/01/02 - 12/31/11. The average was calculated by adding the results for the 10 consecutive calendar years shown and dividing that result by 10.

The 10-year average return and 10 individual annual performance results are shown with all dividends and gains reinvested and are net of all fund fees. All fund expenses have already been deducted from the percentage results shown.

Source for Calendar year results: Zephyr StyleADVISOR

Past performance is no guarantee of future results. Actual future results will vary.

The Retirement Corporation of America (RCA) is under no obligation to use featured managers or funds and will change managers should they fail to meet our selection criteria.

Information pertaining to RCA's advisory operations, services and fees is set forth in RCA's current disclosure statement (copy available upon request from RCA).