Retail investors should rethink Pimco: Trader

Way to play Pimco holdings

As institutional investors weighed what effect, if any, bond guru Bill Gross' sudden exit from Pimco should have on their Pimco holdings, two traders differed on whether retail investors should take flight.

On Friday, Gross shocked the investment community by announcing his departure from the firm he founded more than four decades ago. He'll be joining Janus Capital Group as manager of the Janus Global Unconstrained Bond Fund effective Sept. 29.

Read MoreGross' departure from Pimco is shocking: Bogle

KKM Financial founder and CEO Jeff Kilburg told CNBC's "Power Lunch" anyone who has their money in a Pimco fund should rethink their investment.

"[Gross] is going to make a point at Janus," said Kilberg, also a CNBC contributor and a self-described "big Bill Gross fan."

"There's been a lot of volatility over at Pimco in the last couple months with Mohamed El-Erian leaving and I think Bill is going to go in there and make a bang."

Brent Lewin | Bloomberg| Getty Images

Former Pimco CEO Mohamed El-Erian's recent high-profile departure caused its own stir, with reports circulating that there was tension between Gross and El-Erian, who is now chief economic advisor for Allianz.

Read MoreWith Gross out at Pimco, who's the next bond king?

Jim Iuorio, managing director of TJM Institutional Services and a CNBC contributor, has more of a wait-and-see approach.

"I think people should sit on their hands here. The nature of bond trading is a more sedate thing than stock trading … and I don't think people are jumping out," he told "Power Lunch."

In fact, he said, many people "barely even know they own it" because it is in funds.

Deep bench at Pimco: Analyst

Morningstar said Friday it is placing all rated Pimco funds under review, including the flagship Pimco Total Return, while it assesses the impact of Gross' announcement.

"We don't view this as cause for immediate panic," Michael Herbst, fund analyst at Morningstar, said in an interview with "Street Signs."

Read MoreGross exit ripples bond market

"Obviously Bill Gross has had a huge impact on Pimco as a firm. He has a huge impact on the firm's investment process over the years but it's increasingly become a team effort."

The Pimco Total Return fund currently has a four-star rating from Morningstar.