Gross: Shun duration and buy floating rate notes

PIMCO's Bill Gross is urging investors to play the safe end of the credit space by shunning duration risk, as rising inflation hits yields.

The manager of the world's largest bond fund said treasuries are failing to compensate investors for the risks they are taking, given the inflation outlook, and he urged investors to look to "cheap" bonds in other segments of the market. "Investors should focus on ‘safe spread', which means buying more floating and fewer fixed rate notes," he said in a strategy note. "They should buy into additional credit components such as investment grade, high yield, non-agency mortgage or emerging market related debt, and shade their portfolio in the direction of non-dollar emerging market curren...