Pimco Total Return Fund, run by Bill Gross, lifted its U.S. government debt holdings to 28 percent of assets in March, the highest portion in almost two years.
That represents almost a doubling from 15 percent of assets in February for the world’s biggest bond fund, according to the fund’s web site.
Meanwhile, the fund dropped its portfolio of mortgage-backed securities to 66 percent of assets from 86 percent in February.
Gross told Bloomberg last month that the Federal Reserve may need to triple its balance sheet from the present $2.1 trillion level to make the economy rebound.
“We need more than that,” Gross says. The Fed’s balance sheet “will probably have to grow to about $5 trillion or $6 trillion.”
And he urged investors to stock up on bonds from agencies that have government guarantees, such as Fannie Mae and Freddie Mac.
Last month, the Fed pledged to suck up as much as $300 billion in Treasuries and $750 billion in mortgage-backed debt.
While Gross says that the Fed should buy more Treasuries, he isn’t doing so himself.
The Total Return Fund held about $4 billion in Treasuries at the end of March, about 2.8 percent of total assets and little changed from February, Mark Porterfield, a Pimco spokesman told Bloomberg.
Backing up Gross’ point about Fed activity, the central bank snapped up $5.15 billion of agency debt Monday, its largest such purchase ever.
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