Bill Gross’ Total Return
One of the greatest bond investors of all time, the co-founder of Pimco and manager of its $251 billion Pimco Total Return Fund (PTTAX) has been in the press an awful lot lately. It seems he’ll say almost anything in an effort to persuade his investors to stay put despite the near-unanimous belief bonds and bond funds are going to be slaughtered as interest rates rise.
Can you blame him?
He built his reputation on being the bond guru. If bonds are irrelevant, he’s irrelevant — that’s not the legacy you want to leave. Nonetheless, his comments sound desperate, as Paul Lamonica of CNN Fortune rightly points out.
The reality is, anyone who wants some portion of their portfolio in bonds is better off with a passive index mutual fund or ETF. As Lou Mannheim said to Bud Fox in the movie Wall Street, “Kid, you’re on a roll. Enjoy it while it lasts, ’cause it never does.”