In a recent Bloomberg Television appearance, Gross said he likes the bonds of developing countries such as Brazil and China, although they’re not without risk due to inflation and potential currency disorder. They offer better rates than developed markets in the U.S. and Europe, which are saddled with high levels of debt and leverage, he said.
The stock market has powered higher over the past six months, but there is a chance the Federal Reserve could unveil more quantitative easing, or QE3, at its April meeting. Gross said Fed chief Ben Bernanke “should be satisfied” with a rising stock market and U.S. housing starts, and improvement in employment.
However, the Fed could announce further support for the mortgage market rather than trying to drive down Treasury rates. It will be a “twist on another twist going forward,” Gross said.
The Fed’s “Operation Twist” is designed to force down interest rates by shifting its portfolio into long-term government bonds, but the program ends in June.
Stocks and precious metal ETFs were lower Wednesday after the Federal Reserve minutes suggested the central bank likely won’t engage in further quantitative easing unless the economy backslides. [ETFs Down on Fed, QE3 Outlook]
‘Not going to rest on this one’
Finally, investors can expect bond giant PIMCO to roll out more ETFs.
Gross told CNNMoney he’s been pleased with performance of BOND and that PIMCO is preparing additional actively managed ETFs.
“We’re not going to rest on this one,” he said. [Gross Says PIMCO ETF Not Afraid of Copycats]
PIMCO Total Return ETF
John Spence contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY.