Pimco's Gross Added Treasurys In Jan For 4th Straight Month
February 09 2012 - 5:40PM
Dow Jones News
Bill Gross, manager of the world's biggest bond fund, scooped up
Treasury securities for a fourth straight month in January, turning
overweight on the debt relative to the fund's benchmark bond
index.
Gross, co-chief investment officer at Pacific Investment
Management Co., boosted Treasury bonds holdings for a fourth
straight month at Pimco's flagship $430 billion Total Return Fund
(PTTRX). The holdings rose to 38% of the fund's holdings in January
from 30% in December, according to data released on the company's
website.
That was more than 35.23% required by the benchmark index--the
Barclays Capital US Aggregate Bond Index--at the end of January, a
sharp reversal from last year when at one time he completed dumped
all of the fund's holdings of Treasurys.
Meanwhile, Gross cut the fund's holdings of mortgage-backed
securities to 50% in January, from 48% in December, 43% in November
and 38% in both October and September.
After ill-timed bets early last year wagering on price declines
in Treasurys, Gross has reversed his strategy over the past few
months by buying Treasurys and mortgage-backed securities. The
moves reflected his views that the Federal Reserve's unconventional
monetary-stimulus programs would keep bond yields, which move
inversely to their prices, at relatively low levels.
The fund handed investors a return of 3.46% this year through
Wednesday, beating the 0.55% on the Barclays Capital US Aggregate
Bond Index. In 2011, stung by the sour bets on Treasurys, the fund
posted a return of 4.16%, far below the 7.84% result for the
benchmark index.
Pimco, part of Allianz SE (ALV.XE, ALIZF), is one of the world's
biggest asset-management companies, with more than $1 trillion in
assets under management.
-By Min Zeng, Dow Jones Newswires; 212-416-2229;
min.zeng@dowjones.com