World's Best Trade According to Bill Gross: Short Credit Spreads
- High-yield bond spreads have become too tight, Gross says
- Janus Capital manager says growth forecasts are too optimistic
Billionaire bond investor Bill Gross, a fund manager at Janus Capital, comments on the prospect of a new ultra-long bond during an interview with Bloomberg's Erik Schatzker at the Milken Institute Global Conference. (Source: Bloomberg)
The best trade out there right now? According to bond veteran Bill Gross, it’s shorting credit spreads.
Gross, who manages the $2 billion Janus Global Unconstrained Bond Fund, is betting that high-yield bond spreads have gotten too tight and can only widen after reaching an almost three-year low in March. The so-called Trump trade, which has buoyed risk assets, will gradually unwind as markets are overpriced because investors are too optimistic about the president’s ability to boost U.S. economic growth to 3 percent.