Pimco's Mather says bond investors must revise return expectations

Bond investors need to revise their expectations of the returns they can make in the years ahead, said Scott Mather, one of three Pimco managers who run the firm's Total Return Fund following the shock exit of co-founder Bill Gross last month. In an interview with Germany's Boersen-Zeitung newspaper, Mather, Chief Investment Officer for US core strategies at Pimco, said: "Even if interest rates gradually increase, with a global portfolio of bonds with the best creditworthiness you can maybe expect a return of about 3 percent in the coming years."
He said investors could earn a "little more" but not much more with equities. Pimco's flagship Total Return Fund has seen heavy outflows since Gross announced last month he was leaving the Newport Beach, California-based firm he started in the 1970s to join smaller rival Janus Capital Group.