Pacific Investment Management Co.’s Bill Gross, the manager of the world’s biggest bond fund, said Mexico’s peso and Brazil’s real are better buys for investors than high-yield debt.
“Mexican Peso ‘yields’ 4.5%; Brazilian Real ‘yields’ 7.25%,” Gross said in comments posted today on Pimco’s Twitter account. “Better use of cash than high yield bonds.”
While Mexico’s central bank has held its target rate at 4.50 percent since July 2009, Brazil has lowered its benchmark 3.75 percentage points to 7.25 percent in the past year. Target rates in Europe, the U.S. and Japan are less than 1 percent.
Mexico’s bonds are “attractive” because they offer higher yields, Gross, Pimco’s co-chief investment officer in Newport Beach, California, said Dec. 13. Pimco is the biggest individual holder of Mexican fixed-rate government debt due in 2020, 2021, 2022 and 2024, according to data compiled by Bloomberg.