Top bond fund manager Jeffrey Gundlach says investors should steer completely clear of high-rated bonds with maturities of three years or less — and perhaps even longer.
“There is absolutely no reason to own any investment-grade bonds inside of three years for sure,” Gundlach said on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “And maybe even five years is getting to that category because it has no yield.”
Gundlach says the Federal Reserve isn’t likely to veer from its ultra-low-interest-rate stance anytime soon because it wants price gains. “So it’s not like you will be rolling over into higher yields any time soon,” he said. Instead of investment-grade bonds, Gundlach says he’s interested in mortgage debt, whose yields are better “though not what we’d like to see.”