Market Overview

Barron's: Bill Gross On Interest Rates

  • The cover story in this weekend's Barron's presents bond king Bill Gross's views on how central bank policies are ruining the global and domestic economies.
  • Gross also talks candidly about the pros and cons of his contentious transition from Pimco to Janus.
  • Other featured articles include the latest Barron's mutual fund quarterly report.

Ultra-low interest rates are destroying savers, who are the bedrock of capitalism, says renowned bond investor Bill Gross in this week's cover story in Barron's. Plus, his Janus fund is beating its peers again.

"Bill Gross: Why Interest Rates Must Rise" by Lauren R. Rublin sees Gross making the case that the Federal Reserve must "normalize interest rates over a period of two, three, four years or the domestic and global economy won't function." He considers central bankers to be ignorant of the harm done by their policies, as they believe that the historical model of raising interest rates to dampen inflation and lowering rates to invigorate the economy is still a functional model. He even compares those policies to a certain character from a Monty Python movie.

In addition, see what Gross believes are the chances of a looming recession, what he would do as Fed chair, where he sees the 10-year Treasury yield by the end of the year, and what to expect from the global economy in the next five to 10 years. And find out which two closed-end funds and a mortgage real estate investment trust he favors now. He also shares two examples of ways to invest safely when rates are so low by letting companies "borrow for you."

Gross also candidly about the pros and cons of his transition from Pimco to Janus, and he discusses the Janus Global Unconstrained Bond fund that he manages, including its performance, how it is structured and risks posed by U.S. Securities and Exchange Commission initiatives. He also shares his thoughts on his legacy.

See also: Barron's Picks And Pans: Apple, Seagate Technology, Toll Brothers And More

Other Feature Stories

Check out the mutual fund quarterly report, which includes a close look at famously press-shy fund shop Primecap. Other articles focus on why smart investors should avoid smart beta exchange traded funds (ETFs) and how to choose the best dividend ETFs. Barron's takes a look at the rough first quarter, in which actively managed mutual funds failed to keep up with the index. And take a look at the first-quarter results by sector, as well as the leaders and laggards in the period.

In addition, see what Barron's feels are the prospects for homebuilder Toll Brothers Inc (NYSE: TOL) now that it has expanded into luxury New York condos, Seagate Technology PLC (NASDAQ: STX) and its fat and safe dividend, Apple Inc. (NASDAQ: AAPL) with its growing services business, and Owens-Illinois Inc (NYSE: OI) due to efforts to expand profit margins and boost earnings growth.

At the time of this writing, the author had no position in the mentioned equities.

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