NEW YORK Nov 9 PIMCO Total Return Fund, which
is run by Bill Gross and ranks as the world's largest mutual
fund, increased its exposure to U.S government debt while
continuing to trim mortgage holdings in October, data from the
company's website showed on Friday.
The fund, which has $281 billion in assets, increased its
exposure to U.S. government debt to 24 percent in October from
20 percent in September. It trimmed holdings of mortgage
securities to 47 percent from 49 percent.
The fund, the flagship fund of Pacific Investment Management
Co, had lightened its mortgage holdings to 49 percent in
September from 50 percent in August while decreasing investment
in U.S. government debt to 20 percent from 21 percent.
On Sept. 13, the U.S. Federal Reserve announced a new round
of economic stimulus, with a commitment to buy up to $40 billion
in mortgage securities per month until the outlook for jobs
improves substantially. The U.S. central bank also said it would
keep interest rates ultra low until at least 2015. In late
October, the Fed reiterated it would leave rates unchanged and
stick to its bond-buying plan until the labor market improves
Gross, founder and co-chief investment officer of PIMCO, has
criticized the effectiveness of the Fed's stimulus in recent
letters to investors as well as the negative impact of low
interest rates on savers.
PIMCO had $1.92 trillion in assets as of Sept. 30. The
company on its website said the flagship fund's holdings of
government debt include U.S. Treasury notes, bonds, futures, and
The Total Return Fund also lightened its holdings of
corporate investment-grade credit to 11 percent in October from
12 percent in September while increasing exposure to riskier
high-yield credit to 3 percent from 2 percent the prior month.
The fund is up 9.85 percent year-to-date and is beating 94
percent of peers, according to Lipper.
The Total Return fund also increased its use of U.S.
dollar-denominated interest rate swaps and other rate-related
derivatives, but left its holdings in U.S. agency government
debt, non-U.S. developed countries' debt, emerging market debt,
municipal debt, and "other" credit unchanged.