UPDATE 1-Bill Gross urges exposure to developing markets, cites demographics
(Adds Gross comments)
By Sam Forgione
NEW YORK Jan 7 (Reuters) - Bill Gross, the closely watched bond investor, said on Thursday investors should consider increasing their exposure to developing markets over the long term while buying 10-year inflation-protected Treasuries given demographic factors.
Gross, who oversees the $1.3 billion Janus Global Unconstrained Bond Fund, said in his January Investment Outlook that demographics would dominate financial markets over the next few decades, and developed nations like the United States should invest more in emerging markets to compensate for a growing number of retirees.
He said the United States faces the demographic problem of too few millennial workers to care for too many aging baby boomers, while developing nations are younger demographically.
"Demographics may not rule absolutely, but they likely will dominate investment markets and returns for the next few decades until the Boomer phenomena fades away," Gross said.
Baby boomers are the generation born in the two decades after World War Two, while millennials are those who reached young adulthood around the year 2000.
"It is true that if much of the developing world is younger demographically (think India), then developed nations could and should transfer an increasing percentage of their financial assets to emerging markets to help foot the demographic bills back home," Gross said.
"Long term then, as opposed to currently, think about increasing your asset allocation to the developing world." Continuación...