Orange County Business Journal

Pimco Pares Back on Treasuries for Total Return Fund

Jane Yu Monday, August 13, 2012

Bill Gross of Pacific Investment Management Co. has cut his holdings of U.S. Treasuries in his Total Return Fund, the largest bond fund in the world with $263 billion in assets.

The cofounder and co-chief investment officer of the Newport Beach-based asset management company reduced the proportion of Treasuries to 33% last month from 35% in June, according to the company’s website.

Gross also has reduced mortgages to account for 51% of the fund’s holdings from 52% a month prior.

He has increased debt from non-U.S. developed countries to 6% from 5%.

Gross kept emerging-market debt at 8% and investment-grade credit at 13%.

The Total Return Fund has notched a 7.39% return so far this year, beating 92% of its peers and well ahead of the industry benchmark, which has a 3.99% return. The fund has drawn $8 billion in new cash this year through the end of July.

The Total Return Fund’s exchange-traded cousin, which tracks the mutual fund’s performance, has gained 7.15% through this year.