U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund.
“Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross, 73, said Wednesday at the Bloomberg Invest New York summit.
Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross.
The U.S. economy is expected to grow 2.2 percent this year and 2.3 percent in 2018, according to forecasts compiled by Bloomberg. Trump administration officials have said their policies will boost annual growth to 3 percent.
Gross’s fund has returned 3.1 percent in the year through June 6, outperforming 22 percent of its Bloomberg peers. It has posted a total return of 5.4 percent since Gross took over management in October 2014 after he was ousted from Pacific Investment Management Co.
Janus Capital Group and Henderson Group completed a merger May 30 to form Janus Henderson Group Plc, creating a global investment manager overseeing more than $330 billion. It seeks to use its combined size to compete with lower-fee rivals, such as Vanguard Group, at a time when costs are rising for compliance and technology.
This article was provided by Bloomberg News.