Gross fund takes hit as energy bets backfire

The plunge in oil prices has claimed another prominent victim.

Bill Gross' $1.46 billion Janus Global Unconstrained Bond Fund trailed its benchmark in the fourth quarter of last year primarily because it had plowed about 5 percent of net assets into debt issued by US, Russian and Brazilian energy companies, according to a quarterly overview published on the Denver-based firm's website. Those bonds and emerging market sovereign debt that Gross agreed to insure were all hit by the 42 percent collapse in crude prices during the period.

"Energy sector exposure detracted the most from the fund's performance," Janus said in the fourth-quarter commentary, adding that "exposure to US dollar-denominated Russian and Brazilian corporate bonds" also hurt. "The sharp decline in crude oil prices" along with the declines of the countries' currencies "drove underperformance here".