Gross Exposes $42 Trillion Bond Market’s Key Flaw in Exit
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One man shook a $42 trillion bond market last week, highlighting just how vulnerable bond prices are to shocks.
Bill Gross’s surprise departure on Friday from Pacific Investment Management Co. sparked selloffs in some of his biggest wagers, such as inflation-protected U.S. government bonds. The most-traded assets quickly recovered after the exit of the star trader, who dominated the $2 trillion asset manager’s investment strategy. But the less-traded ones are still feeling the effects, according to David Leduc, chief investment officer at Standish Mellon Asset Management Co.