Monday, May 16, 2011

PIMCO is long gold

I previously blogged about how PIM(P)CO was ramping up their equities team.  I snooped around on their website for recent hires, and it looks like they have recently beefed up their equities team <click here>.

I sent this email to a group (the infamous BORG group of activist investors) last week (May 9):
When the biggest bond fund manager in the world is SHORT bonds (including Treasuries and mortgage-backed securities), he's expecting a bond collapse.  And because Bill Gross is building up his equities team (including emerging markets), he thinks the Asian growth story in stocks is alive and well.  One of their hires is a foreign exchange (forex) and derivatives trader, so he's also hedging.
It looks like PIMCO, the world's largest bond fund, is long gold after all, via their equities fund exposure:
The largest position in the fund is gold, which we think is a very good form of protection against what can go wrong. We were encouraged by the fact that a lot of the central banks, especially in Asia, are big buyers. We think that's an underlying trend that's very favorable for gold.
I also follow Rob Arnott, who runs the PIMCO's All Asset Fund.  He's a proponent of sound money as well, and typically bullish on precious metals, the ultimate hedge against debased currencies.

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