In follow up to our announcement Friday regarding the resignation of PIMCO bond fund manager, Bill Gross, North Pier Fiduciary Management held an emergency meeting of its Investment Committee to discuss all PIMCO funds in our covered universe. North Pier’s committee has voted unanimously to terminate PIMCO Total Return in all of our discretionary 401(k) plans and are recommending replacement to our non-discretionarily advised 401(k)s. We have also liquidated the fund from all of our discretionarily managed accounts. We view this manager change as a fatal blow to the fund’s track record, rendering it completely inapplicable in evaluation of the fund’s future prospects, thus making it an imprudent investment. We are presently conducting replacement searches.
North Pier is further evaluating other PIMCO funds in our universe that were not under Mr. Gross’ direct management, but may also be affected by fallout from analyst defections and the economic implications to PIMCO from massive redemptions. North Pier will vote on the remaining funds at our regularly scheduled October meeting.
For additional insight into the matter, please read Margaret Collin’s Bloomberg article, for which we were interviewed.