CHICAGO -- The Federal Reserve will not officially launch a third round of quantitative easing to help boost the flagging economy, but will rely instead on a “magical weapon” -- the language of its policy statements to try to keep interest rates historically low for an extended period, PIMCO money management titan Bill Gross said Wednesday at the Morningstar Investment Conference.

“What I think the Fed will do is basically keep yields relatively low via language,” Gross told attendees at the Chicago gathering. “The language will be the new QE3 -- it won’t be a purchase program… That’s a magical weapon to keep real interest rates down at these levels.”

Gross also urged the 1,650 investment professionals at the 23rd annual Morningstar conference, which the research firm said was a record turnout, to focus on broadening their portfolios beyond American stocks and bonds.

“You must get outside the United States,” he said several times. For financial planners wary of becoming too heavily weighted outside the U.S., Gross said, “Get them into Procter & Gamble, get them into J&J, get them into Coke,” which derive a huge bulk of their top and bottom lines from global growth and historically have paid solid dividends. Given paltry bond yields, “There’s a real interest rate there,” he said.

Gross also cited investment opportunities in Brazil, despite higher risks -- including a history that includes government bond defaults. “There is a country that’s really got it going on,” said Gross, who helps oversee more than $1 trillion in investments at PIMCO.

In an interview afterward with Financial Planning, Gross said he was enthusiastic as well about the potential for investment growth in China and India, although he stressed that Brazil “has a more developed financing market where a bond investor, or basically any investor, is able to participate.”