Our answer: There’s no need to panic, but it’s time to consider other options. You’ll find plenty of better alternatives run by firms that aren’t engulfed by turmoil. What’s more, caution is always warranted when any key manager leaves. And Gross made the big-picture calls on the economy and interest rates that steered the strategy of many Pimco funds. He also ran Pimco Total Return (symbol PTTDX), which until recently was the largest mutual fund.

The bond king wasn’t always right. In 2013, the Newport Beach, Calif. firm made bad bets on emerging-markets debt and on Treasury inflation-protected securities. Both suffered big losses when interest rates rose in the middle of that year. The damage was extensive: More than half of Pimco’s 87 funds ranked in the bottom half of their peer groups last year.

One bright spot is Pimco Income (PONDX), which has been in the top 20 percent of the multisector-bond-fund category in each of the past five years (including so far in 2014). Daniel Ivascyn, who co-manages Income, was promoted to group chief investment officer after Gross left.

Even before Gross’s departure, it was an eventful year for Pimco. In March, Mohamed El-Erian, Pimco’s CEO and co-chief investment officer, left. And in mid September, news surfaced that the Securities and Exchange Commission was investigating whether the firm inflated the returns of Pimco Total Return ETF (BOND), an exchange-traded fund that Gross ran.

Meanwhile, Pimco has had to deal with a yearlong run of redemptions. In September alone, investors withdrew nearly $26 billion more in assets from Pimco than they deposited. The lion’s share of that, $18 billion, came out of Total Return. If you’re thinking about bailing out of Total Return, figure out first if you’ll be on the hook for capital-gains taxes. (If you hold the fund in a tax-deferred retirement account, you needn’t worry about it.)

Should you follow Gross to his new fund? We’d wait. At Janus Global Unconstrained Bond, Gross will have more freedom to invest in any part of the bond market. That may or may not be a good thing. But he’ll almost certainly have fewer resources at his disposal than he did at Pimco. If you want an unfettered bond fund, consider Metropolitan West Unconstrained Bond (MWCRX) or Osterweis Strategic Income (OSTIX), both members of the Kiplinger 25, the list of our favorite mutual funds.

(Nellie S. Huang is a senior associate editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com .)

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