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Mohamed El-Erian on paper sounds good. Real life, not so much.

Amir
edited August 2013 in Fund Discussions
Mr. El-Erian's PIMCO Global Multi-Asset (PGAIX) sounds like an elegant solution, if you believe in his 'new normal.'

When launched back in 2008, he said this:

"On design, we felt it important to provide those clients looking for absolute returns the ability to tap the range of liquid global markets in order to find what we view are the most compelling places to generate returns and manage risk. Thus, we included global equities, commodities, currencies and fixed income."

Intellectually, PIMCO's secular forum process brings together braniacs, PGAIX's managers have impeccable credentials and are held in high esteem, yet look at the (very lackluster) results, as it approaches its 5th anniversary - in every category - monthly, YTD, 1 and 3 years - it is in the 90th percentile.

Do you folks think he's really involved in running it, or should Mo take his name off, and tend to his CEO and co-CIO chores?

Comments

  • scott
    I question whether he's really that involved with it.
  • TedTed
    Reply to @scott: I agree with you Scott.
    Regards,
    Ted
    PGAIX: Managers: http://financials.morningstar.com/fund/management.html?t=PGAIX&region=USA&culture=en-US
  • VintageFreakVintageFreak
    edited August 2013
    Are we looking to blame someone else for PGMDX performance?:)

    Why are we assuming he is not much involved with it? Because it is not performing? Sorry, that makes no sense to me one way or another.
  • ducrow
    edited August 2013
    Reply to @Vinta You Are Spot ON!!!! If El-Erian Was Not Running It, He Would Have Removed His Name From The Fund Years Ago. By The Way I Was A Past Owner Of The Fund!!!! It Took Me 3 Years To Wake Up To The Fact That He Is A Fraud!!!!!
  • beebee
    edited August 2013
    To me, he cries wolf way too often. I rarely get anything from him that is useful...I don't need any help bumming myself out. He's way to helpful in that regard. Did he work at Hussman before arriving at PIMCO?
  • InvestorInvestor
    Reply to @ducrow: I believe it is a common practice among mutual fund companies to include a marquee name to attract assets even if he might not be involved with day to day activities.
  • ducrow
    Reply to @bee: You Are Funny, But You Are Right!!!!
  • BobCBobC
    Certainly PIMCO would never project El-Erian and Gross as stars, to get press coverage, would they? How funny is that! The company has made a very big point of 'establishing' these two as gurus. They are smart, that is for sure. But they are not able to foretell the future any more than I am. They are good money managers, but even the best have periods of time when they are just wrong.

    They are not frauds. But it's darned hard to live up to the image of Grand Poobah, which PIMCO would have us believe they are, when sometimes their strategies are off the mark. There are a lot of good managers, it just takes some time to sort through some of the garbage to find those who quietly go about their business, year after year.
  • scott
    Reply to @bee: Was a higher-up at the International Monetary Fund and ran Harvard's Endowment Fund for a bit.
  • InvestorInvestor
    Reply to @scott: I think he ran Emerging Markets bond fund (or portfolio) at PIMCO between IMF and Harvard as well.
  • scott
    Reply to @Investor: Yep, you're right. Was at Pimco between IMF and Harvard. If I remember correctly, the EM fund did have an excellent record when he did manage it.
  • VintageFreakVintageFreak
    Reply to @Investor: Given my general confidence in ASSet managers, I will not even remotely challenge that statement. I just didn't ever see anyone make a similar statement regarding any other manager.

    For instance, Causeway is a much hyped mutual fund company. Sarah Keeterer who came from Merrill Lynch was supposed to be "IT" for international investing. I even bought into it. So what's the fuss with Causeway that M* loves so much? Is she actually running her funds?

    See?:)
  • VintageFreakVintageFreak
    Reply to @bee: Please insult Hussman and El Erian differently if you must. Hussman donates 60% of profits to Charity. There is no record of El Erian donating any of his earnings to charity. El Erian for all his fame could also go start El Erian Funds. He decided to come to PIMCO.

    Hussman has his and his companies reputation at stake for his calls. El Erian by himself I don't think is causing any damage to PIMCO.
  • VintageFreakVintageFreak
    Reply to @BobC: I agree. One has to wait 10, 15, 20 years. And only AFTER that does one know who was right and who was wrong.
  • fundalarmfundalarm
    edited August 2013
    Reply to @Investor: actually, SEC requires Prospectus amendment every time there is a porfolio manager change. Portolio Manager is someone who is involved in daily management of the fund.

    i would think that MEE runs pre-market meetings with his PM staff where latest economic developments and fund positioning are discussed. he is not involved in micro-management and rebalancing but no large re-allocation among asset classes is done without his input -- you can bet.
  • InvestorInvestor
    Reply to @fundalarm: Call me skeptic. You can do a lot on paper to appear to be a portfolio manager. I suspect similar operation is going on on a lot of shops. Royce funds comes to my mind.
  • hank
    Wondering how their cozy relationship with CNBC works? Does CNBC pay these guys to be on air? Or - do they pay CNBC for the privilege of appearing and showcasing their "wares." Excuse my skepticism ... but it's highly unlikely Bill and Mohamed just happen to drop by whenever they're in the neighborhood.
  • fundalarmfundalarm
    Reply to @Investor: the big kahuna set up strategic allocation and any changes to it -- you can be assured. strategic allocation doesn't change daily (usually annually, if at all) but everything is based on it. that's why their names are on these funds. i am sure they have tons of vehicles that follow allocations that they set up -- and they are listed as PMs on those. i've lived this business in the last several years. it's pretty standard.
  • VintageFreakVintageFreak
    edited August 2013
    It depends on who has the need? Marsico NEEDEED M* to give him a Video Audience. Marsico did not get paid.:-)

    Same with fund managers I would think. Now those guys who appear on the main block and stay for hours, I think those are getting paid. I mean you have Hedge Fund managers sitting for 4 hours talking nothing on CNBC while someone else (who?) is watching their assets. Or maybe they are influencing price moves on their assets. I mean they are getting paid. And then they are getting paid some more.

    More importantly, do we all understand and accept what is finally happening here? As soon as the general perception is that the bond boom is over, Gross and El Erian are getting MILLERed. If you get my drift:D

    No Sirree. Me no want Miller. We no want Gross. Me no want EE. Who's next? Gundlach?
  • hank
    edited August 2013
    Reply to @VintageFreak: I don't know. But was surprised to see El Erian on PBS Nightly Business Report tonight. I thought: "What's he doing here?" Than it occurred to me CNBC has taken over NBR. Don't think he said anything new. Guess he recommends 10-15% gold at these prices. Not me brother! ... War in Middle East might disrupt oil supplies. Duh?
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