Gross Rolls Down Curve for Non-Normal Bond Returns

Bill Gross is realizing gains by benefitting from the near record difference in yields between short- and longer-maturity bonds while preaching that investors should prepare for lower-than-average returns.

“What we think is most attractive is the positioning in terms of the curve,” said Gross, the manager of the world’s biggest bond fund at Pacific Investment Management Co. “As long as short rates stay at zero or close to zero, and that’s the key caveat, then an investor can make money simply by buying 5-year Treasuries, watching them roll down the curve to four years and then popping back up to five years again.”