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.