Scott Berry at Morningstar wonders if the Bond King will underperform the index this year now that his Harbor Bund (HABDX) returns slightly less than benchmark year-to-date, after many years of superior returns.

We've written a lot about what makes Gross a great bond manager, but his success year in and year out versus the Lehman Brothers Aggregate owes much to his flexibility. While some managers peg their fund's interest-rate sensitivity to the index's, invest only in domestic bonds, avoid derivatives, or all three, Gross doesn't limit himself. He employs risk controls and keeps the portfolio broadly diversified, but he goes where he finds value. That can mean increasing the fund's interest-rate sensitivity as he did in 2002, bulking up on nondollar bonds as he did in 2003, or even dabbling in emerging-markets debt as he did in 2004. The result has been a remarkably consistent and terrific long-term record.

Gross hasn't spun as much magic in 2006, though. Harbor Bond has fully participated in the recent rally, but it hit a rough patch in May and June, when domestic yields spiked and overseas markets slumped. Overall, the fund has returned 2.60% for the year to date through Oct. 10, while the index has returned 2.65%.