In 2012 bond maven Bill Gross famously called the US markets the “cleanest dirty shirt.”
Gross retired last week after nearly 50 years in the bond biz. He co-founded Pimco in 1971 and in 1987 he created the Total Return Bond Fund.
Reaching record-setting assets of $300 billion in 2013, under his tenure Total Return returned an average of 7.65% annually. These were astonishing returns for a bond fund.
Quit while you’re ahead.
In 2014, after running the fund for 27 years, he made and abrupt and ungracious Pimco exit. Within days, he popped up at Janus, touting a similar strategy with a new "Unconstrained Bond Fund."
Needless to say his new fund languished - seriously underperforming benchmarks and the Total Return fund he left behind.
Despite his latest au revoir his “cleanest dirty shirt” metaphor is again au currant.
Developed market growth is decelerating – especially in Europe and Japan. In 2019, EU growth is expected to average 1.5% and Japanese growth just 1.3%. For the US, the growth estimate is 2.5% - hardly huge in its own right but a boon by comparison.
Weekly Update, Week ending February 8, 2019 The S&P 500 was up 11bps even as the Dow Jones added 32bps, the Russell 2000 increased 31bps and the Nasdaq added 53bps.
As for US bonds, they added 38bps.
Globally, the MSCI World Index lost -41bps and the Barclays Global Aggregate Bond Index declined -23bps.
The Euro Stoxx 50 lost -1.12% in local-currency (Euro) and -2.32% in USD. Meanwhile, the Topix declined -1.61% in local-currency (Yen) and -1.76% in USD.
