Tad Rivelle decided in 2008 that prices for some bonds got so low after Bear Stearns Cos. and Lehman Brothers Holdings Inc. collapsed that they made sense only if the U.S. was headed into another Great Depression.
TCW Group Inc.’s wager on risky mortgage bonds, which last year caused the money manager to trail 87 percent of competitors, is paying off now as investors in the securities shrug off Europe’s debt crisis amid signs U.S. housing is stabilizing.
Pacific Investment Management Co. and TCW Group Inc. are investing in bonds guaranteed by aircraft as U.S. carriers hold back from adding seats to protect profitability , preserving the value of their planes.
Bill Gross’s Pimco Total Return Fund, the world’s biggest mutual fund, is trailing a low-cost Vanguard index fund this year as some of the top bond investors were blindsided by the rally in Treasuries.
The big winner in the battle over the U.S. government budget may be the bond market, as investors say for the first time since the onset of the financial crisis they see lawmaker resolve to trim the $1 trillion deficit.