Chinanews.com, Sept. 6-according to a comprehensive report, Bill Gross, a legendary former bond investor, said that bonds are "junk" and that buying US government bonds is almost certainly a bet to lose money.
Gross, the former "bond king", transferred Pacific Investment Management (PIMCO) before leaving in 2014.) into a $2 trillion asset management company. He posted an article on his website about investment prospects, launching the latest fierce attack on the asset class that made him famous that year.
Treasury yields have fallen sharply in recent months, taking many large investors by surprise. On September 2nd, the yield on the 10-year US Treasury, the benchmark for global financial assets, was just 1.29 per cent, well below its peak of 1.75 per cent at the end of March.
Mr Gross believes that at current levels, yields have "nowhere to go but to rise", given that the Fed is expected to start scaling back its bond-buying programme soon. The yield on 10-year Treasuries could rise to 2 per cent over the next 12 months from about 1.3 per cent currently, representing a loss of about 3 per cent for investors, Mr Gross said.
"Cash has been rubbish for a long time, but now there are new competitors," Gross said. Medium-and long-term bond funds are also in this trash can. "