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NEW YORK, Jan 10 (Reuters) - The PIMCO Total Return Fund, the world's largest mutual fund, increased its Treasury holdings while decreasing its mortgage holdings in December, data from the firm's website showed on Thursday.
The flagship fund, which has $285.4 billion in assets, increased its exposure to Treasuries to 26 percent from 23 percent in November. Meanwhile, the fund decreased its biggest holding in mortgage securities to 42 percent from 44 percent in November.
Bill Gross, who runs the fund as PIMCO's founder and co-chief investment officer, said in his January investment letter that the U.S. Federal Reserve's monthly purchases of mortgages and Treasury securities will lead to inflation and gradually weaker investment returns.