Bill Gross Investment Outlook Dec - 01
Bill Gross Investment Outlook Dec - 01
Bill Gross Investment Outlook Dec - 01
Bill
Gross
Outlook
December 2001
December 2001
expect, would take several years to shows that on average for post WWII
threaten a resurgence of inflation. recessions, the first tightening comes
In turn, gloomy global economies, espe- on the very month that capacity utiliza-
cially that of Japan, promise no excessive tion hits 82%.
demand pressures any time soon.
Average Change in Fed Funds from Month Mfg Cap
If inflation comes down and stays Exceeds 82% From The Downside
3.50
down, there seems to be no basis to
3.00
presume a bear market in bonds absent
2.50
a crash in the dollar and withdrawal of
Percentage Points
2.00
foreign investment. The past 4 weeks’ 1.50 Average Change in Fed Funds
overdo things too) and not a debacle in -0.50 Month Mfg Cap Util Rate Crosses North of 82% from Below
Source: PIMCO
the making. What bond investors have -1.00
-12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36
really been trying to do is to forecast the Months Following Move Above 82%
Mr. Gross is the Manager of PIMCO Total Return Fund. The stock securities mentioned in the article are not holdings in the PIMCO
Total Return Fund. The Fund may invest up to 20% in foreign securities, which may entail greater risk due to foreign economic and
political developments. Investment in high yield, lower rated securities generally involves greater risk to principal than investment in
higher-rated securities. Mortgage-backed securities may be sensitive to changes in prevailing interest rates, when they rise the value
generally declines. There is no assurance that the private guarantors or insurers will meet their obligations. All holdings are subject to
change and are as of 9/30/01.
Each sector of the bond market entails some risk. Municipals may realize gains & may incur a tax liability from time to time. Treasuries
& Government Bonds guarantee timely repayment of interest and does not eliminate market risk, shares of the funds are not
guaranteed. Mortgage-backed securities & Corporate Bonds may be sensitive to interest rates, when they rise the value generally
declines and there is no assurance that private guarantors or insurers will their obligations. An investment in high yield securities,
lower rated securities, lower rated securities generally involves greater risk to principal than an investment in higher-rated bonds.
Investing in foreign securities may entail risk due to foreign economic and political developments and may be enhanced when investing
in emerging markets.
PIMCO Total Return Fund Top Holdings representing 44.35% of the portfolio 1. GNMA I TBA 6.50% OCT, 2. FIN FUT EURO-
BOBL 5Y EUX GSC 12/06, 3. GNMA I TBA 8.00% OCT, 4. FIN FUT EURBUND 10YR EUX DEU12/6, 5. FNMA TBA 6.00% OCT,
6. US TREASURY INFLAT PROTECT, 7. FIN FUT US 30YR CBT DEU 12/19/01, 8. US TREASURY INFLAT PROTECT, 9. GNMA I
TBA 7.50% OCT, 10. GNMA I TBA 7.00% OCT.
For additional details on PIMCO Funds, contact your financial advisor to receive a prospectus that contains more complete
information, including charges and expenses. Please read the prospectus carefully before you invest or send money. Pacific
Investment Management Company, 840 Newport Center Drive, P.O. Box 6430, Newport Beach, CA 92658-6430, www.pimco.com, 1-
800-927-4648. An investment in a (the) fund is not a deposit of a bank and is not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other government agency. In addition, it is possible to lose money on investments in a (the) fund. The
Morningstar Fund Manager of the Year Award winners are chosen based upon Morningstar’s own research and in-depth evaluation by
its senior editorial staff. *Source: net assets by Financial Research Corporation for the period ended 9/30/01.
No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission.
This is not a recommendation or offer of any particular security, strategy or investment product, but is distributed for educational
purposes only. © 2002, Pacific Investment Management Company.
PA822.12/01