Tags: Pimco Total Return May Buy Equity-Linked Securities

Pimco Total Return May Buy Equity-Linked Securities

Thursday, 16 Dec 2010 02:55 PM

Pimco Total Return Fund, the world's biggest bond fund at $256 billion, said on Thursday it may start investing up to 10 percent of its assets in ''equity-related'' securities, such as convertibles and preferred stock.

The fund, managed by Bill Gross, outlined its expanded investment guidelines in a filing with the Securities and Exchange Commission. The fund, part of Pacific Investment Management, said it may start investing in the new instruments after the first quarter of 2011.

Pimco, based in Newport Beach, California, said in the filing it will not invest in common stock.

Mark Porterfield, spokesman for Pimco, declined further comment.

The expansion of investment guidelines will bring Pimco Total Return in line with competing bond funds and in line with several other Pimco funds.

Like other bond funds, Pimco saw monstrous net inflows in the wake of the global financial crisis as investors sought safety in fixed-income investments. Pimco altogether oversees more than $1.1 trillion.

But in November, Pimco Total Return saw investors pull some $1.9 billion in November, the most in two years, according to mutual-fund tracker Morningstar.

The Total Return fund lost 1.5 percent in November, its worst month since September 2008, Morningstar said.

Treasurys have come under severe selling pressure on signs the U.S. economic recovery is strengthening, and the sell-off that began last month could result in further reallocation into other riskier securities including stocks.

Pimco's flexibility into equity-related securities could, however, buffer the impact of a flight into riskier assets.

© 2017 Thomson/Reuters. All rights reserved.

 
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Pimco Total Return Fund, the world's biggest bond fund at $256 billion, said on Thursday it may start investing up to 10 percent of its assets in ''equity-related'' securities, such as convertibles and preferred stock. The fund, managed by Bill Gross, outlined its expanded...
Pimco Total Return May Buy Equity-Linked Securities
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2010-55-16
Thursday, 16 Dec 2010 02:55 PM
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