Tags: Pimco | Gross | Foreign | Bonds

Pimco's Gross Increases Holdings of Foreign Bonds

Tuesday, 23 Mar 2010 01:50 PM

By Dan Weil

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Bill Gross raised his foreign and developed nation bond holdings in Pimco's Total Return Fund to the highest level in almost six years last month.

As of February, those securities accounted for 19 percent of the portfolio in the world’s biggest bond fund. That’s an increase from 18 percent in January and represents the fourth consecutive month of increase, Bloomberg reports.

At the same time, Gross lifted the fund’s U.S. government debt holdings to 35 percent of its assets from 31 percent in January.

That was the first gain in that area since October 2009. As a result, net cash dropped to 2 percent from 9 percent.

In his latest commentary on Pimco’s Web site, Gross writes, “Investors should obviously focus on those sovereigns where fundamentals promise lower credit or inflationary risk.”

And which countries are those?

“Germany and Canada are amongst those at the top of our list while a rogues’ gallery of the obvious, including Greece, Euroland lookalikes, and the U.K. gather near the bottom,” Gross says.

“The careful discrimination between sovereign credits is becoming more than casual cocktail conversation.”

Gross isn’t the only one who’s bearish on the euro zone.

"The euro will probably break up in the next 15 to 20 years," investment legend Jim Rogers told CNBC.

"We've had currency unions in history. They didn't survive, and this one won't survive either."

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