Fund Lessons From Bill Gross

The founder of Pimco is a legendary bond manager.
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) -- Recognized throughout the financial world as the "Bond King," Bill Gross has made a name for himself being arguably the greatest bond manager of all time. Today, as founder and chief operating officer of Pimco, Gross, along with fellow financial icon Mohamed El-Erian, runs what has become the world's largest fixed-income management firm.

Aside from overseeing the internal affairs at Pimco, Gross personally manages the company's successful flagship mutual fund, the

Pimco Total Return Bond Fund

(PTTRX) - Get Report


Since he started PTTRX, this instrument has grown to become the largest bond fund in the nation. Pimco Total Return is also the only bond fund in the country listed among the five largest mutual funds. With this success, some could say Gross is the Peter Lynch of the bond world.

Bill Gross, a Ohio native, received an undergraduate degree in psychology in 1966 from Duke University. It was at Duke that, while studying for his bachelors, a car accident led him to his first love: gambling.

During his recovery, he became fascinated and obsessed with the game of black jack. This interest drove him to spend a summer in Las Vegas upon graduation. By playing the tables in Sin City, he was able to turn $200 into $10,000. After serving a serving for term in Vietnam, Gross used his Vegas winnings to pursue a business degree at UCLA.

Today, the lessons Gross learned while at the black jack table -- the importance of odds, patience and emotions -- continue to influence his business decisions as the head of Pimco.

Upon receiving his MBA in 1971, Gross joined the Pacific Mutual Life Insurance Co. where he worked as a bond analyst for the then obscure branch known as the Pacific Investment Management Co. -- Pimco.

In 1982, with Gross at the helm, Pimco separated from Pacific Life. The company has since expanded into the successful enterprise it is today. In 2000, Pimco was purchased by



, the Munich-based financial services firm. As of Sept. 30, 2009, Pimco boasted nearly $950 billion in assets under management.

While Pimco's success has mainly come from its fixed-income family of mutual funds, the firm has recently begun taking steps into the expanding world of exchange traded funds. Today, ETF investors have the opportunity to tap Bill Gross' brain using instruments such as

PIMCO 1-3 Year U.S. Treasury Index Fund

(TUZ) - Get Report


PIMCO 3-7 Year U.S. Treasury Index Fund



PIMCO 25+ Year Zero Coupon U.S. Treasury Index Fund

(ZROZ) - Get Report

. While these funds are still relatively new to the ETF arena, it is likely that, with the insight of Bill Gross backing them, they have a bright future.

Gross' success over the past 38 has gained the attention of a number of famous financiers. Both Warren Buffett and Alan Greenspan have sang his praises at one time or another.

Aside from working with Pimco, Gross has also shown to be a successful author and financial commentator. Through numerous books and other publications he has shared his knowledge on bonds and expressed his insight and opinion concerning the present and future of the global economy.

Like Buffett, when Gross speaks, the rest of Wall Street listens. In fact, in a recent Bloomberg poll, Gross beat out the likes of fellow financiers such as George Soros and ranked No. 2 as the individual with the most financial wisdom behind Warren Buffett.

Outside of the financial world, this financier has earned a reputation for his eccentric hobbies. Aside from practicing yoga, Gross is also an avid philatelist. His collection includes among others, every 19th century U.S. stamp.

-- Written by Don Dion in Williamstown, Mass.


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At the time of publication, Dion did not have any positions in the equities mentioned.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.