Bill Gross is shifting back into a heavier weighting in US Treasuries, and lightening his mortgage securities exposure. This is a reversal from his view during the crisis when he saw relative value in mortgages.
In addition, he’s increasingly investing in longer-dated Treasuries in order to position himself for a deflationary environment.
Gold and commodities, beware.
Bloomberg: “There has been significant flattening on the long end of the curve,” Gross said in an interview from Newport Beach, California, with Bloomberg Radio. “This reflects the re- emergence of deflationary fears. The U.S. is at the centre of de-levering as opposed to accelerating growth.”
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