The investment fund Pimco forecast at least two increases of key interest rate in USA until the end of 2017. According to Pacific Investment Management, the high economic growth and inflation will push the central bank to react and increase the rates. The investment fund, which operates the world’s largest actively managed mutual fund, published this assumption amid soaring oil prices, which have led to speculation that US inflation may be accelerating.
The actions of investors, who are prepared for action by the Fed, made US government securities worst performing government bonds. The yields on 10-year US Treasuries fell by 5.8% in the last three months on Monday. However, the yields on US government bonds is likely to grow, as Fed probably will increase the interest rates with 25 or 50 basic points in December.
The return on Total Return Fund at Pimco amounted to 4.2% this year, leaving behind 3/4 of its competitors. For the past five years the performance is better than that of almost 80% from its competitors. With assets amounting to 84.4 billion USD, Total Return Fund e largest actively managed mutual fund in the world.
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