By Min Zeng 

Pimco's Total Return Fund increased holdings of U.S. government-related debt and mortgage-backed securities in December amid strong global demand for U.S. fixed-income assets.

The world's largest bond fund by assets nearly dumped all of its holdings of developed countries' government bonds denominated in foreign currencies last month. The fund also boosted holdings of emerging-market assets.

The holdings of the $143.4 billion fund are being monitored by investors following the abrupt departure of longtime Total Return manager Bill Gross in late September. Clients pulled $18 billion from the Pimco fund in December, adding to the outflows that have been hitting the fund for more than a year, according to Morningstar.

U.S. government-related holdings accounted for 43.19% at the end of December, compared with 37% at the end of November and 35% at the end of October, according to data available Wednesday afternoon on Pacific Investment Management Co.'s website.

The Pimco fund's U.S. government-related holdings include Treasury bonds, Treasury inflation-protected securities, Treasury futures and derivatives linked to U.S. government debt securities.

The fund's holdings of mortgage-backed bonds was 25.43%, compared with 23% at the end of November and 22% at the end of October. The fund's emerging-market holdings rose to 17.67% at the end of December, from 16% at the end of November.

In contrast, holdings in developed countries other than the U.S., which include sovereign debt sold by eurozone countries, the U.K. and Canada, tumbled to 0.07% at the end of December, compared with 6% at the end of November and 12% at the end of October.

Mr. Gross surprised the investing world on Sept. 26 when he announced his departure from Pimco, which he co-founded in 1971, following a year of heavy outflows from the Pimco flagship bond fund and a fight with his former chief executive and heir apparent.

Investors pulled $150 billion from Pimco's mutual funds last year in the largest-ever annual exodus from a mutual-fund company, according to preliminary figures from Morningstar. The last time a fund company saw withdrawals near this size was in 2011, when investors pulled about $82 billion from Los Angeles-based American Funds amid poor performance, according to Morningstar.

The Pimco Total Return fund posted a loss of 0.48% in December, underperforming the benchmark Barclays U.S. Aggregate Bond Index, which gained 0.09%, according to data from Morningstar.

The fund posted a total return--including price changes and interest payments--of 4.69% in 2014, trailing the 5.97% return from the index.

The fund maintains a solid long-term track record. Its annualized average return over the past 15 years through Tuesday was 6.91%, beating 96% of its peers.

Write to Min Zeng at min.zeng@wsj.com

Access Investor Kit for Allianz SE

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0008404005

Access Investor Kit for Allianz SE

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0188051017