No comment on Pimco’s new strategy
Gross had said during the midst of the credit crunch that Treasuries offered little value as investors seeking a refuge from turmoil in global financial markets drove yields to record lows in December. He boosted the $177.5 billion Total Return Fundâ€™s investment in government-related bonds to 44 percent of assets, the most since August 2004, from 25 percent in July, according data released earlier this month on Pimcoâ€™s Web site. The fund cut mortgage debt to 38 percent from 47 percent.
â€œWeâ€™ve exchanged our mortgages for the governmentâ€™s checkâ€ as the Federal Reserve winds down purchases of agency debt, Gross said today. â€œMortgages are expensive compared to Treasuries and other vehicles.â€
Pimcoâ€™s Total Return Fund handed investors a 17.85 percent gain in the past year, beating 94 percent of its peers, according to data compiled by Bloomberg. The one-month return is 1.94 percent, outpacing 57 percent of its competitors. Pimco is a unit of Munich-based insurer Allianz SE.
â€œWith Treasury yields near the top of our expected range, Pimco plans to overweight duration and take exposure to the five- to 10-year portion of the yield curve,â€ the firm said July 20 in a report on its Web site.