Jackson National Life is switching fund managers for its core $3.5 billion fixed income offering.
In a regulatory filing, the variable annuity provider said Pimco’s Total Return bond strategy is out and DoubleLine Capital’s Core Fixed Income Fund is in, according to a Reuters report.
Jackson’s medium-term fixed-income investment option is to be renamed JNL/DoubleLine Core Fixed Income and is set to be a subaccount option for clients in variable annuities.
DoubleLine CEO and Chief Investment Officer Jeffrey Gundlach is the fund’s portfolio manager, along with Deputy CIO Jeffrey Sherman. The Pimco fund was led by Bill Gross until he left Pimco in September 2014 to join Janus Capital, where he runs the Janus Henderson Global Unconstrained Bond Fund.
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Jackson National will still offer clients the JNL/Pimco Income Fund and JNL/Pimco Real Return Fund. It rolled out the JNL/Pimco Total Return Bond as an option in 1998, the news report said. (Calls to the annuity firm were not returned as of press time.)
Morningstar says that the Pimco Total Return Fund (PTTRX) is “the most heavily redeemed fund for the third year running.” (Pimco is owned by insurer Allianz.)
As of April 30, the fund had lost $15 billion over 12 months; that represents about 17% of its assets, leaving it with some $73.6 billion of assets, according to a June 1 report led by Karen Wallace, a senior editor with the Chicago-based research firm.
“The late-2014 departure of Bill Gross certainly started the stampede; in 2014 the fund lost an estimated $93 billion in assets; then in 2015 and 2016 it lost another $53 billion and $14 billion, respectively. Middling performance over the medium term hasn’t convinced investors to stick around, either,” she explained.
Holdings in the DoubleLine Core Fixed Income Fund (DBLFX, DLFNX) have an average duration of 5.13 years.
The fund, which has a five-star rating from Morningstar, has a 3.05% year-to-date return as of May 31. Its one year performance is 3.74%, while its average annualized performance since June 2010 is 5.73%.