Bill Gross is running his $1.5 billion Janus Global Unconstrained Bond Fund by himself — again.
Kumar Palghat, who joined the mutual fund as a portfolio manager supporting Mr. Gross after Janus Capital Group acquired a majority interest in his investment firm Kapstream Capital last July, is no longer involved, according to a securities filing Thursday. Mr. Palghat is ending his role as he adds responsibilities to become co-manager of a new exchange-traded fund, Janus Short Duration Income ETF, with Nick Maroutsos, who also came to the firm with Kapstream.
Mr. Palghat “will discontinue his role as portfolio manager of the Janus Global Unconstrained Bond Fund,” the company said in a statement.
The Janus Global Unconstrained Bond Fund returned 3.7% this year through Wednesday, beating 65% of its Bloomberg peers. Since Mr. Gross took over management in October 2014, the fund has returned 2.8%.
The short-duration ETF aims to deliver returns 2% to 3% above the three-month London interbank offered rate. It will compete with two of the largest actively managed ETFs, the $4.7 billion PIMCO Enhanced Short Maturity Active ETF, and the $2 billion iShares Short Maturity Bond ETF.
“So far the only two things have really been successful in the active ETF category are rock-star managers and short-duration bond funds,” said Eric Balchunas, an ETF analyst with Bloomberg Intelligence.
Mr. Gross jumped to Janus in 2014 after an acrimonious departure from Pacific Investment Management Co., which he co-founded in 1971. Mr. Palghat worked at PIMCO before co-founding Kapstream with Mr. Maroutsos in 2006.
This ETF will complement the Kapstream Absolute Return Income strategy, according to Janus. The strategy is “performing very well, and we're starting to see significant market interest around the world,” Janus CEO Dick Weil said on an earnings call Tuesday. “This quarter, marketing and advertising increased, due to some opportunistic spend on our ETF launches, as well as several targeted marketing campaigns, including some focused efforts around our Global Unconstrained Bond Fund.”