(Bloomberg News) Pacific Investment Management Co.'s Bill Gross said structural headwinds will dominate the economic debate no matter who wins the U.S. presidential election.
The fiscal gap is enormous, Gross, who runs the world's biggest bond fund, said in an interview on Bloomberg Television's "In the Loop" with Betty Liu.
Markets suggest that a victory by Mitt Romney will be better for equities because taxes on dividends and capital gains won't be going up as much as under a second Barack Obama administration, Gross said.
Gross reduced his holdings of Treasuries for a third consecutive month in September to the lowest level since last October on concern record U.S. debt will lead to inflation.
The proportion of U.S. government and Treasury debt in the $278 billion Total Return Fund dropped to 20 percent of assets from 21 percent in August, according to latest available data on the Newport Beach, California-based company's website. Mortgages remained his largest holding at 49 percent.
The fund gained 12 percent over the past year, beating 96 percent of rival funds, according to data compiled by Bloomberg. It has returned 8.5 percent over five years, topping 96 percent of comparable funds.