By Min Zeng
Bill Gross, manager of the world's biggest bond fund, cut
slightly both holdings of Treasury bonds and mortgage-backed
securities in July.
Treasury bonds holdings at the $270 billion Total Return Fund
(PTTRX), managed by Mr. Gross, who is co-chief investment officer
at Pacific Investment Management Co., slipped to 33% last month
from 35% in June, according to data released late Thursday
afternoon on the company's website.
Meanwhile, the fund's holdings of U.S. mortgage-backed
securities ticked down to 51% from 52% at the end of June,
unchanged from May.
Still, Treasury bond and MBS holdings accounted for 84% of the
fund. Mr. Gross have heavily parked cash in high-grade U.S. assets
this year, a reflection of his worries over the global economic
outlook stung by the euro zone's sovereign debt crisis.
Like some other investors, Mr. Gross has argued that interest
rates in the U.S. would remain low and could even go lower thanks
to the Federal Reserve's easy monetary policy.
Speculation has risen that the Fed might launch a new
bond-buying program in September targeting both MBS and
longer-dated Treasury bonds--which could boost the value of Mr.
Gross's bond fund.
Mr. Gross's fund has handed investors a return of 7.3% this year
through Wednesday, beating 92% of comparable bond funds and
outperforming the 3.3% return on the benchmark Barclays Capital US
Aggregate Bond Index.
Over the past 15 years, the fund has handed investors an
annualized return of 7.4%, compared to 6.3% on the benchmark index.
Pimco, part of Allianz SE (ALV.XE, ALIZF), is one of the world's
biggest asset-management companies, with over $1.7 trillion in
assets under management.
Write to Min Zeng at min.zeng@dowjones.com