Gross 'not braggin' after short-term Treasuries call

Gross tweeted: “Not braggin' but what did we tell you” about short-term treasuries.
SEP 20, 2013
Bill Gross got it right when he recommended short-maturity Treasuries this week. “Not braggin' but what did we tell you,” Gross, who runs the world's biggest bond fund at Pacific Investment Management Co., wrote on Twitter Wednesday. The difference between five- and 30-year yields widened to as much as 2.38 percentage points today, the most in almost six months. Gross wrote on Twitter on Sept. 15 that investors would demand more yield to own long bonds versus five-year notes after Lawrence Summers quit the race to head the Federal Reserve. The former Treasury secretary's decision ended speculation that he would undo the central bank's policies aimed at holding down borrowing costs. The Fed unexpectedly refrained from reducing its $85 billion pace of monthly bond buying yesterday, saying it needs more evidence of lasting improvement in the economy. Futures contracts indicate investors are betting policy makers will wait longer before raising their target for overnight lending between banks, benefiting short-term Treasuries, those that are most sensitive what the central bank does with its benchmark. Vice Chairman Janet Yellen, a supporter of Bernanke's policies, is the top candidate to succeed him, according to people familiar with the process. Summers's decision to withdraw marks the beginning of the Yellen Fed, Gross said in his Twitter post Wednesday. Traders will have a “frontend friendly” market for a long time, he wrote, referring to the shortest Treasury maturities.

Fund Performance

Gross' $251.1 billion Total Return Fund has fallen 2.5 percent this year, underperforming about two-thirds of its peers, according to data compiled by Bloomberg. During the past five years, it has gained an average of 7.5 percent annually, ranking in the 89th percentile. Pimco, based in Newport Beach, California-based company is a unit of Munich-based insurer Allianz SE. The Fed left unchanged its outlook that its target interest rate will remain near zero “at least as long as” unemployment exceeds 6.5%, so long as the outlook for inflation is no higher than 2.5%, according to a statement after its two- day meeting concluded yesterday. Unemployment was 7.3% in August, and the central bank's preferred measure of cost increases in the economy was at 1.4 percent in July. The Fed has kept the target for its benchmark in a range of zero to 0.25 percent since 2008. (Bloomberg News)

Latest News

Workers are financially drowning and retirement savings is a major red flag
Workers are financially drowning and retirement savings is a major red flag

Transamerica Institute survey reveals a stark divide between employer confidence and workers' financial reality.

SEC corporate enforcement hits multi-decade low as agency refocuses on fraud
SEC corporate enforcement hits multi-decade low as agency refocuses on fraud

Just five actions were started in the first half of fiscal 2026, a new analysis finds.

Beyond the Business: Why Advisors Must Help Owners Separate Wealth from Identity
Beyond the Business: Why Advisors Must Help Owners Separate Wealth from Identity

For business owners, the company is often more than an income source. It becomes their largest asset, their retirement plan, and in many cases, part of their identity. Advisors who understand that dynamics can deliver far greater value than traditional financial planning alone

Ex-Edward Jones advisor gets three-year prison sentence for stealing from widow
Ex-Edward Jones advisor gets three-year prison sentence for stealing from widow

John S. Winslow, 57, was indicted just over a year ago for his scheme to steal from an elderly client.

Vestmark, Hamachi push AI further for advisor portfolio intelligence
Vestmark, Hamachi push AI further for advisor portfolio intelligence

Hamachi's new model portfolio partnership and an industry-first solution from Vestmark join the growing wave of AI tools for wealth managers.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline