wage American voters,” Gross added.
“I write in amazed, almost amused bewilderment at what American voters have done to themselves.”
Gross became the world’s most famous bond fund manager at Allianz’s Pacific Investment Management, he ran Pimco Total Return and worked until 2014, when he joined Janus. He now oversees the $1.7 billion (R24 billion) Janus Global Unconstrained Bond Fund.
In his outlook, Gross said he did not vote for the Republican Trump or Democrat Hillary Clinton, and admitted that Clinton probably would not have done much better to redistribute wages towards the working class.
He said it was “doubtful” that Trump’s plan to repatriate huge corporate profits to the US for infrastructure spending would succeed, saying a similar effort in 2004 resulted in large stock buybacks, dividend payouts and corporate bonuses, but no noticeable uptick in investment.
Gross said Trump’s policies mark a “continuation of the status quo”, and government could step in with a “help America” jobs programme to bolster labour in ways that overleveraged, cost-conscious corporations might not.
Regardless, Gross said “populism is on the march” and could last for decades unless workers’ share of GDP reverses its downward trend. Trump’s immigration, tax and trade policies might not promote that outcome, he said.
“Investors must drive with caution, understanding that higher deficits resulting from lower taxes raise interest rates and inflation, which in turn have the potential to produce lower earnings and price-earnings ratios,” Gross added.
Gross’ fund through Monday returned 4.5% this year, outpacing 68% of its peers, according to Morningstar data. Janus last month announced a plan to merge with London-based Henderson Group.