Tags: Bill Gross | Short | Credit | CDS | Indexes | Best | Trade

Short Credit With CDS Indexes for World's Best Trade, Gross Says

Image: Short Credit With CDS Indexes for World's Best Trade, Gross Says
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Thursday, 04 May 2017 07:05 AM

The best trade out there right now? According to Bill Gross of Janus Capital, it’s shorting credit spreads using corporate credit default swap indexes.

The Janus Global Unconstrained Bond Fund that Gross manages has shorted credit spreads using CDX, and the trade “makes all the sense in the world,” Gross said in an interview with Bloomberg TV at the Milken Institute Global Conference in Beverly Hills, California. “I don’t think high-yield spreads have any more to compress,” he said.

The Milken conference kicked off Monday, convening 4,000 power players to opine on topics from breaking up the big banks to chasing yields. Money managers are seeking to navigate stubbornly placid markets, which crimps their ability to turn profits.

“Volatility is very, very low,” said Gross, 73, whose fund controls about $1.97 billion of assets. “So what does Gross do? Basically you temper your attitude toward what typically is a profitable structural trade because the price is definitely not right in any category at the moment.”

Gross said the U.S. Federal Open Market Committees decision to leave interest rates unchanged after a disappointing first quarter was “milquetoast” and that he concurs with views expressed by futures markets -- there will be another rate hike this year and possibly another next January.

“I have a sense that the market has it more right than the Fed,” Gross said.

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The best trade out there right now? According to Bill Gross of Janus Capital, it's shorting credit spreads using corporate credit default swap indexes.The Janus Global Unconstrained Bond Fund that Gross manages has shorted credit spreads using CDX, and the trade "makes all...
Bill Gross, Short, Credit, CDS, Indexes, Best, Trade
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2017-05-04
Thursday, 04 May 2017 07:05 AM
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