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More Questions About PIMCO in the Post El-Erian Era

The tumult surrounding El-Erian's departure is unsettling, but PIMCO has a lot of firepower to aim at the problem.

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Questions surrounding Mohamed El-Erian's recently announced departure and the flurry of other personnel changes that followed at PIMCO continue to proliferate, and, if anything, that trend has intensified over the past week. Morningstar has been fielding those questions left and right, from audiences as diverse as individual investors, advisors, institutions, and the press. A number of themes have come up consistently in these conversations, and we thought it worthwhile to address a few of them here along with Morningstar's preliminary thoughts on the current situation at PIMCO.

How much of an effect did the market calls made by PIMCO over the past year have on Mohamed El-Erian's departure?
The official version from PIMCO is that El-Erian's departure was purely a personal decision and that it had nothing to do with last year's performance. That said, it makes sense to consider what’s gone on not only over the past year, but what’s occurred over the past few years, given that there was some difficulty, particularly in the third quarter of 2011, with some of the calls that the firm made.

Eric Jacobson has a position in the following securities mentioned above: PTTRX, PRRIX. Find out about Morningstar’s editorial policies.