Gross recently tweeted a warning on Treasuries. He said if investors want to own long Treasuries, buy them in TIPS form – Treasury Inflation Protected Securities. Gross said 2-3% inflation is “a minimum in future years.”
In February, Gross cut Treasury holdings in Total Return Fund, and raised the fund’s position in mortgages.
The PIMCO co-founder said even though bond yields are exceedingly and artificially low, baby boomers looking for safety will continue to buy bonds.
Gross also said investors should be careful with high-yield bonds. Defaults in the sector are low due to the Fed’s quantitative easing, but if the U.S. economy falters, defaults could rise, he said. Total Return ETF can buy high-yield bonds but doesn’t have many of them, he added.
TRXT usually trades between 100,000 and 200,000 shares a day so far. The ETF has already gathered assets of about $184 million.
PIMCO Total Return ETF