The major difference is that Black Rock will be hedging their bond exposure in the futures market, while PIMCO has to stand naked.
The bond contract will be leading the way as rates go higher and bond prices fall.
* * * * * J B K * * * * *
San Francisco
The highest 10-year Treasury note yields since 2008 are proving too good to pass up for BlackRock Inc. even as Pacific Investment Management Co. says the best is over for bonds.
"We're more comfortable owning longer Treasuries," said Stuart Spodek, head of U.S. bonds at New York-based BlackRock. The world's biggest money manager, with $3.35 trillion in assets, is becoming bullish because "there isn't inflation in the pipeline" and the gap between short- and longer-term yields is "remarkably steep," Spodek said in an interview last week. As recently as October, he said the "easy money has been made" in government debt.
For Pimco, which runs the world's biggest bond fund, record budget deficits and sales of government debt will eventually spur inflation, drawing the almost three-decade bond market rally to a close, Bill Gross, the Newport Beach, California- based firm's co-chief investment officer, said in a March 25 interview with Tom Keene on Bloomberg Radio.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDMWur4iH4Qg&pos=5
