Pimco's Total Return Fund, the world's biggest bond portfolio, slashed its government-related debt holdings in December to its lowest levels in nearly two years, according to the money manager's website on Friday.
The $241 billion portfolio run by Bill Gross, who also is co-chief investment officer at Pacific Investment Management Co., cut its holdings of government securities — which can include Treasurys and interest-rate swaps — to 22 percent last month from 30 percent in November, it said. That was the lowest percentage holding since February 2009, when holdings were 15 percent.
Gross, who helps oversee more than $1.1 trillion with co-chief investment officer Mohamed El-Erian, earlier this month said that "mindless" U.S. deficit spending could result in faster inflation, a weaker dollar and the eventual loss of the nation's gilt-edged credit ratings.
Deficits eventually raise debt to unmanageable levels, as has been witnessed in Greece and Ireland, he said.
In December, Pimco added to holdings of mortgage-backed securities, corporate and emerging market bonds, according to the website.