The Bond King is getting bearish on bonds, to the dismay of individual investors who poured nearly $90 billion into them last year.
From here on out, the asset class will be in for a tough slog that will only get uglier and uglier:
Pacific Investment Management Co.’s Gross, manager of the world’s biggest bond fund, said yesterday in an interview with Tom Keene on Bloomberg Radio that “bonds have seen their best days.” Pimco, which announced in December that it would offer stock funds, is advising investors to buy the debt of countries such as Germany and Canada that have low deficits and higher- yielding corporate securities.
The prospect of a strengthening U.S. economy and rising interest rates makes an “argument to not own as many” bonds, Gross said in the interview.
His company Pimco, the top dog of bond investing, has even started to offer stock funds. That should say it all.
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