Pimco Favorites From Swaps to Peso Take Hit on Gross Resignation

09/26/14 Bloomberg

Bill Gross’s departure from Pacific Investment Management Co. is sparking a selloff in markets from credit derivatives to the Mexican peso as traders contemplate the potential fallout from the sudden exit of the world’s biggest bond trader. Credit derivatives indexes that Pimco has used to wager billions weakened as traders speculated those positions will be among the easiest for the firm to unwind should it face a wave of redemptions. Treasuries slumped on concern Gross’s departure may prompt a shift away from U.S. government debt. Mexico’s currency and Italian and Spanish government bonds, other big bets by the firm managing almost $2 trillion of assets, also dropped.

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Pimco to Norway Love Mexico as New Bond Gauges Use GDP

Bloomberg, 1/22/2013

The world’s biggest investors are moving away from allocating money to government bond markets based on their amount of debt, a strategy that has favored the largest borrowers for three decades.

Norway’s $702 billion sovereign-wealth fund and Pacific Investment Management Co. are starting to shift to indexes that favor less-indebted nations with growing gross domestic product, such as Brazil and South Korea. Pimco boosted the proportion of Mexican holdings while trimming the percentage allocated to U.S. issues in its biggest exchange-traded fund. BlackRock Inc. (BLK), the world’s largest money manager, with $3.8 trillion in assets, has $3 billion tied to a gauge based on credit-worthiness rather than capitalization.

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Pimco Leads Bullish Investors Backing Pena Nieto: Mexico Credit-Mexico Institute in the News

Bloomberg Business Week 11/30/2012

Duncan Wood

Responsible economic management has been a hallmark of the Calderon administration, said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington.

“If Pena Nieto can continue to follow those conservative approaches, he’ll have a huge benefit over the next six years,” Wood said in a telephone interview. “Mexico has every possibility of really booming as an economy.”

 

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