A prolonged low interest rate environment will start pushing investors into choices they wouldn't normally make, Pimco's Bill Gross said in his latest letter to investors.
In a highly debt-laden world where the Federal Reserve will have no choice but to keep rates low, Gross said investors looking to fixed income and cash investments will find their returns going forward low by historical standards.
As a result, they'll have to go outside their normal choices and traditional allocations to find opportunities.
He expects a world in which 2 percent is considered the "neutral" interest rate that helps keep debt costs low while staving off inflation. That's good for debtors but rough on those—such as pension fund managers and savers—who look for higher cash returns to meet their objectives.