Bill Gross professed his undying love for Mexico, reports Bloomberg.
Gross has taken to the Internet to confirm his continued love for the central American country, saying it his “best” recent trade idea. And, wink wink, nudge nudge, you should see how attractive its yields are.
Gross has had a crush on Mexico for about three years now, since the country began large scale changes to its energy policies. Now Gross is eyeing its slow inflation as an indication that interest rates are going to stay low. Mexico is one of the top 10 holdings in Gross’s Global Unconstrained Bond Fund.
“He’s postulating that Mexico will successfully see off inflationary pressures and the actual path of the policy rate will come in lower than what you’re seeing in the forward curve,” said Michael Roche, a fixed-income strategist at Seaport Global Holdings. “He’s sharing that observation with everyone and I must say it does seem pretty reasonable.”
Mexico’s 7.1% debt returns aren’t too shabby, but they do fall short of the emerging market average. Moody’s has the country ranked at A3, six levels below the U.S.
Photo: Christian Frausto Bernal via Flickr.