The struggling U.S. economy is prompting the world’s biggest private-sector bond investor to seek out better opportunities elsewhere, particularly in Canada.
Bill Gross, founder and co-chief investment officer of Pacific Investment Management Co. (PIMCO), indicated in a recent interview that Canada had become a preferred destination—good news given that PIMCO currently oversees more than $1.1-trillion (US) in investment assets.
“There are higher-yielding and better alternatives in this global marketplace than a U.S. two-year Treasury at 50 basis points,” explained Gross during the Globe and Mail exclusive interview. Despite $1-trillion (US) of stimulus spending, America is still struggling under enormous debt and trying to stave off deflation.
Mexico and Brazil are among the other nation’s Gross is keeping an eye on. “In general, the developing world is in much better position than the developed world, so that’s where the dollars should go.”
The world’s biggest private-sector bond investor says the U.S. Federal Reserve Board is doing about all it can reasonably do to backstop the struggling U.S. economy and stave off deflation. But America’s government, despite $1-trillion (U.S.) of stimulus spending, isn’t doing nearly enough.
And until it comes up with some new solutions, Bill Gross says, his investment eyes will continue to wander to greener pastures – including Canada.
“We’re much more in awe of countries such as Canada, with a decently balanced budget, and with low debt-to-GDP, and with financial institutions that have been solvent and sound and conservative in their lending, and that have something to export,” said Mr. Gross, founder and co-chief investment officer of Pacific Investment Management Co. LLC (commonly known as PIMCO), which oversees more than $1.1-trillion (U.S.) in investment assets, primarily in the bond markets.
“North of the border has become, while not our favourite destination, certainly a preferable destination to what we see in the United States.”