Guggenheim's Minerd: Time to Start 'Nibbling' on U.S. Treasuries

Apr 28 2016 | 10:15pm ET

By Jennifer Ablan (Reuters) - Scott Minerd, global chief investment officer of Guggenheim Partners, said on Wednesday it is a good time to dip into U.S. Treasuries in the wake of their sell-off.

"It is impossible to get the timing of anything exactly right. You have to ask yourself, 'Are you a speculator or an investor?'" Minerd said in an interview in New York.

"We are investors and we believe it is a pretty good period to start nibbling on Treasuries."

Minerd said Guggenheim, which has $240 billion in assets under management, purchased agency mortgage-backed securities and agency debt securities this week. "We purchased long-duration, high-quality agencies," he said.

The $2.8 billion Guggenheim Total Return Bond Fund, which is run by Minerd, is up 3.33 percent for the three-year period ended April 26, surpassing 99 percent of its intermediate-term peer category, according to Morningstar data. The Guggenheim Total Return Bond Fund is surpassing its category for the three-year period by 1.72 percentage points, Morningstar said.

Other high-profile investors have voiced similar sentiments on Treasuries.

On Tuesday, Jeffrey Gundlach, the influential head of DoubleLine Capital, said investors looking to purchase Treasuries in the wake of the bond market's sell-off are making a prudent move. "I think it is a reasonable strategy to start legging into the Treasury market," he said in a telephone interview.

Minerd also commented on the Federal Reserve's policy decision on Wednesday, saying that while the Fed left the door open to an interest rate hike, possibly at its next meeting on June 14-15, he does not think it will happen. He said the "Fed is hostage" to macro events with major uncertainty and potential volatility like Brexit.

Britain will vote on a referendum on June 23 to decide whether the country should remain in the European Union.

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