Pacific Investment Management Co. is starting to see opportunity in Treasuries after a selloff spurred by concerns over US President Donald Trump's policies.
Markets are focusing on the risk that "foreigners might reduce allocation to US holdings but not assigning as much probability to a scenario that growth will be weak," Mohit Mittal, Pimco's chief investment officer for core strategies, said in a Bloomberg TV interview. Given the US economy is likely to slow longer term, there is value in US bonds at these levels, he added.
The Pimco call indicates some investors may be beginning to see the worst of the rout as over, after a
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"Treasuries start to look quite attractive in the five to 10-year point," Mittal said. Earlier this month, 10-year yields jumped more than 70 basis points in a matter of days to near 4.6%, after plunging below 4%.
Pimco last week likened the turmoil in US assets to the
Recent volatility has "created opportunities to add exposure for patient investors like ourselves," said Mittal. "If you think about it in the next six months to one-year horizon, chances are growth will be lower than what it is today."
