Bill Gross, manager of the world’s biggest bond fund, is proving once again that he’s willing to suffer short-term pain for long-term gain.
The billionaire investor and co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co. has seen his flagship Total Return Fund gain 2.52 percent since eliminating U.S. government debt from his holdings in February, and betting against the securities, forgoing an additional 3.1 percent in Treasury returns in the last three months, according to data compiled by Bloomberg. The fund beat just 55 percent of its peers in the past month, the data show.
While that may seem disappointing for a manager who has outperformed 99 percent of his rivals in the past five years, history shows that Gross’s calls often seem wrong before proving accurate and generating above-average returns for investors. In 2007, his fund lost about 0.8 percent through June, trailing the performance of 80 percent of comparable funds before rebounding to beat 99 percent of them for the year as the Federal Reserve began to lower interest rates, as he predicted.
Keep reading here: Gross Has ‘No Regrets’ Missing Treasury Bond Rally for Long-Term Strategy – Bloomberg.
