Pedestrians pass the entrance to a National Bank location in Toronto’s financial district.Charla Jones/The Globe and Mail
National Bank of Canada is striking a partnership with Bill Gross, once dubbed "the king of bonds."
The country's sixth-largest bank started a new global fixed-income fund mid-last month and its portfolio is being managed by Mr. Gross and the team at Denver-based Janus Capital Management LLC.
The NBI Unconstrained Fixed Income Fund will invest mainly in fixed-income securities of issuers with various maturities and credit ratings, according to the fund's prospectus. It also includes a mix of other asset classes including common and preferred shares, mortgage-backed securities and derivatives. Up to 25 per cent of the fund's net assets can be invested in high-yield bonds.
Jonathan Durocher, president of National Bank Investments Inc., expects the fund to look a lot like the Global Unconstrained Bond Fund that Mr. Gross manages at Janus. Half of Mr. Gross' $1.68-billion (U.S.) fund is in U.S. credit and it has 70 per cent exposure to the U.S. market.
"We want to have the true Bill Gross experience as any type of investor would," Mr. Durocher said Thursday in an interview. "Our goal is to have the same strategy as his Janus fund. It's really in the same mould."
The fund Mr. Gross manages at Janus has gained 4.7 per cent so far this year, according to Morningstar. It's grown a total of four per cent since Mr. Gross took over the fund in late 2014.
This is the latest in a string of partnerships the Montreal-based bank has inked. It outsources portfolio management to well-known asset managers including Goldman Sachs Asset Management, Rothschild Asset Management Inc., CI Investments Inc. and Fiera Capital Corp.
The bank says it is the only major Canadian bank that enlists third-party portfolio managers from around the world to run its funds. It sold its asset management business to Fiera in 2012.