Pimco forecast a "new normal" in May 2009 of slower growth in the developed economies, higher unemployment and orderly deleveraging. Gross, founder and co-chief investment officer of Pimco, wrote in his investment outlook in January that the new normal was morphing into a world of credit and zero-bound interest-rate risk.
A commentary posted by Gross on Newport Beach, California- based Pimco's website yesterday said investors should embrace a defensive strategy that includes emphasizing income, deemphasizing derivative structures that are fully valued and being willing to accept returns lower than historical averages.
Mutual fund companies are trying to reverse stock fund redemptions after investors pulled money from funds that invest in U.S. equities for five straight years, withdrawing $134 billion last year, according to the Washington-based Investment Company Institute.
Promoting Confidence
Financial institutions and governments can also help turn savers into investors by passing regulations that promote confidence in the markets, Fink said in today's remarks. Examples include better investor protections for futures trading and clearer labeling of ETFs, he said.
Fink, who co-founded BlackRock in 1988, has built the firm through acquisitions including the 2006 purchase of Merrill Lynch & Co.'s investment unit. BlackRock acquired the hedge fund-of-funds business of Quellos Group LLC in 2008. The company last year expanded the alternatives division, which manages hedge funds, real estate funds and private-equity strategies.