Pimco co-CEO Bill Gross says the 30-year-long bond rally will fizzle and expire as nations sell record amounts of debt to fund their deficits, a move that will in turn will spur inflation and push interest rates higher.

"Bonds have seen their best days," Gross told The Washington Post, adding that that as U.S. Treasury returns fall investors will have to take more risk with high-yield bonds, equities and, eventually, real estate.

"If you're talking about the next 10, 15, 20 years, there's certainly the recognition that assets will grow faster in those categories," Gross says.

"Over the long term, stocks return more than bonds when appropriately priced at the beginning of an investment period."

Gross’s firm began offering equities with EqS Pathfinder, a global fund the firm launched that buys undervalued securities, mainly in Europe. The fund, which had attracted more than $500 million, declined 1.7 percent in the month ended June 7, beating 96 percent of similarly managed funds.

Most of Pathfinder's major positions, which include British American Tobacco, French foodmaker Groupe Danone and Hong Kong’s Link Real Estate Investment Trust, make at least part of their earnings from emerging markets.

The fund also owns the SPDR Gold Trust exchange-traded fund.

Despite his forecast, Gross also recently increased holdings of government-related debt in his company’s Total Return Fund's to the highest level since last November.

With $1.1 trillion in assets, Pimco is the fastest-growing group of investors, accounting for 84 percent of all U.S. mutual fund assets at the end of last year, according to data from the Investment Company Institute in Washington.