Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, has backed away from his earlier strategy of selling off Treasuries.

Earlier this year, Gross sold all Treasury holdings in the Newport Beach-based firm’s $244-billion Total Return Fund. He based the move on an expectation that bond yields would increase as the Federal Reserve completed the second round of its bond-buying program in June, and that inflation would inch up in an improving economy.

Instead the yield on 10-year bonds has been slipping steadily since the February-high of 3.75% and now stands at 2.28%. The return on bonds is in negative territory with inflation taken into account.

Gross recently wrote on Pimco’s website that “approaching recessionary winds force the Fed and private investors to favor bonds.”

Along with growing fears of another recession, the recent debt-ceiling debate in Washington, a credit-rating downgrade for the U.S. government by Standard and Poor’s, and turmoil in stock markets here and overseas have caused investors to buy U.S. bonds for safety.

Bond prices, which move inversely to yields, have climbed in response.

Gross said he has recently resumed buying Treasuries based on a moderated view from a more bearish outlook on government debt several months ago.

According to market analyst Morningstar Inc., Pimco’s bond fund has returned 0.16% over the past three months, underperforming the benchmark Barclays Capital Aggregate Bond Index, which has generated a return rate of 2.78% over the same period.

For the year, Pimco has returned about 3%, trailing peers and ranking 157th out of 179 intermediate-term bond funds tracked by Lipper.