Bill Gross: US markets at highest risk levels since before financial crisis

Central bank policies are artificially driving up asset prices while creating little growth, according to the manager of the Janus Henderson Global Unconstrained Bond Fund

Jun 7, 2017 @ 11:25 am

By Bloomberg News

U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they're taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund.

"Instead of buying low and selling high, you're buying high and crossing your fingers," Mr. Gross, 73, said Wednesday at the Bloomberg Invest New York summit.

(More: Best- and worst-performing funds of the Trump rally)

Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Mr. Gross.

The U.S. economy is expected to grow 2.2% this year and 2.3% in 2018, according to forecasts compiled by Bloomberg. Trump administration officials have said their policies will boost annual growth to 3%.

Mr. Gross's fund has returned 3.1% in the year through June 6, outperforming 22% of its Bloomberg peers. It has posted a total return of 5.4% since Mr. Gross took over management in October 2014 after he was ousted from Pacific Investment Management Co.

(More: Bill Gross ends lawsuit with Pimco for $81 million and his reputation intact)

Janus Capital Group and Henderson Group completed a merger May 30 to form Janus Henderson Group Plc, creating a global investment manager overseeing more than $330 billion. It seeks to use its combined size to compete with lower-fee rivals, such as Vanguard Group, at a time when costs are rising for compliance and technology.

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