Gross’s Janus Global Unconstrained Bond Fund has returned 0.8 percent in the past month, beating 98 percent of comparable funds, according to data from Morningstar Inc. Since Gross took over Oct. 6, the fund has lost 0.2 percent, beating 53 percent of rivals, Morningstar data show.
The fund is benefiting from “pretty big positions” in Mexico, including hedged bonds, he said. He’s also selling short-dated calls and puts on Treasury bonds, betting the 10- year U.S. note will trade within 2.1 percent and 2.5 percent over the next few months.
His S&P short is earning the fund as much as $5 million today, he said.
Gross makes “boring” but lower-risk purchases such as buying short-dated corporate bonds about to mature, to form what he calls the crust of the portfolio. That framework “actually has saved me” over the nine months he’s managed the fund, by providing a “2 percent steady-Eddie yield,” he said.