Bill Gross: Two countries with better investment prospects than the U.S.

Bill Gross, manager of the world’s biggest bond fund, said developing economies such as Brazil and South Korea offer attractive investment opportunities as growth in developed markets including the U.S. has slowed. Brazil offers real interest rates of 8 percent to 9 percent, Gross, 66, said an interview today on Bloomberg Television’s “Surveillance Midday” with Tom Keene. The Korean won is representative of “strong emerging-market currencies to stand in contrast to the U.S. dollar,” Gross said. Gross and Mohamed El-Erian, co-chief investment officers of Pacific Investment Management Co., coined the phrase “new normal” in 2009 to describe the decreasing role of the U.S. in the global economy. They forecast developed-market growth that is below historical averages in the next three to five years as economies struggle with mounting budget deficits and increased regulation after the 2008 collapse of credit markets. Gross, founder of the Newport Beach, California-based Pimco, runs the $252 billion Pimco Total Return Fund. The fund has advanced an average of 8.4 percent in the past five years, beating 98 percent of similarly managed funds, according to data compiled by Bloomberg.