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Last updateSat, 29 Jul 2017 12am

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PIMCO Total Return Raises Holdings of Treasuries

PIMCO Total Return Fund, managed by Bill Gross with AUM $289 Billion, increased its holdings of Treasuries from 28% to 33% of asset last month, the highest level since July.  It cuts mortgage holdings from 36% to 33% in March, maintain its holdings of non-US developed nations debt at 11%; investment-grade credit at 9%; emerging market debt at 7%; municipal-bonds holding at 5% and net cash-and-equivalent position from negative 3% from negative 1%.

Further to that, It is the first time in months Bill Gross has turned bullish on longer-dated Treasuries such as 10 years and 30 years.  He had stayed away from those as he was concerned that their value would get hit hard if the Federal Reserve eased back on its bond-buying program.

Gross believe that the Bank of Japan’s aggressive plan to buy Japanese government bonds will prompt Japanese investors to seek out higher returns in other markets overseas and that, in turn, will lift prices of asset around the world, including US Treasuries.

“This BOJ printing seeps out daily into global markets as Japanese institutions, which have sold their Japanese government bonds to the BOJ, look for higher-yielding replacements,” Gross said. “Ten-year Treasurys to us look very low yielding, but to them, they yield 125 basis points more.”

PIMCO Total Return Fund’s performance against the key indices are shown below:


Source: iFast Financial Pte Ltd


  1. MarketWatch, The Tell, 2013-04-09, “Bill Gross Turns Bullish on 10-year Treasurys on Japan’s Bond Binge”
  2. Bloomberg Businessweek, Susanne Wlaker, 2013-04-09, “Bill Gross Raises Holdings of Treasuries to Highest Since July”