2013 was definitely not a year to remember for Pimco’s Bill Gross. Pimco’s flagship Total Return Fund — managed by Bill Gross — lost 1.9% for the year, the bond fund’s worst performance since 1994. Gross took major positions in U.S. Treasuries, inflation-linked bonds and Brazilian debt in 2013, all of which turned out to be less than profitable.
Statement from Bill Gross
Wall Street veteran Bill Gross, noted for his acerbic wit, described his fund’s 2013 underperformance as akin to a case of the flu. “Our performance periodically, and sometimes for frustrating long stretches, stuffs our noses or aches our heads, and makes us wonder why we hadn’t been more careful about washing our hands during flu season.”
Bill Gross also garnered some attention back in September when he publicly congratulated himself on his call that the Fed would further delay the start of tapering via a tweet — “Not braggin’ but what did we tell you”. Three months later, however, the Fed began the long-awaited taper.
Actually outperformed bond fund average for 2013
Of course, nobody’s happy losing money, but it should be pointed out that bonds funds overall lost just over 2% on average in 2013, a statistic which puts Pimco’s 2013 performance in a somewhat better light.
2013 was a standout year for equities. In fact, almost all classes of equities outperformed bonds last year. Dan Culloton, fund analyst at Morningstar in Chicago, sums up 2013 from an investor’s perspective. “Equities have done better than bonds, US equities have done better than foreign equities, and small-cap US equities have done best of all, especially those that are posting the fastest growth.”
Equity funds dominated
Given the market conditions in 2013, it is no surprise to find out that equity funds dominate the list of top performing mutual funds. T Rowe Price’s New Horizons fund, managed by the more reserved Henry Ellenbogen, was the number one performing mutual fund in 2013, producing a whopping 49% return for investors. According to Morningstar, mutual funds with more than $10 billion in total assets were up by 15.6% in 2013.