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Bill Gross ups Treasuries bet in $236bn bond fund

Bill Gross ups Treasuries bet in $236bn bond fund

Bill Gross has taken Treasury exposure up to 46% in his $236 billion PIMCO Total Return Bond fund – marking one of his strongest allocations to the sector of the past two years.

Gross, who famously dumped all US Treasury holdings in 2011, has been gradually building back exposure since February of 2012.

However, an increase in his holdings to 46%, up marginally from December’s figure of 45%, marks a significant weighting to a sector about which Gross was previously highly critical.

While Gross had become more constructive on Treasuries, and US government-related securities in general, he had refrained from large bets in his blockbuster fund.

Notable increases had seen him allocate 38% to Treasuries in July 2013 before dropping this down again over the summer months.

Another sector which Gross has shown strong support for over the past 18 months is mortgage-backed securities, which also received more capital allocation this month.

Gross made a marginal increase here, raising his MBS exposure from 35% at the end of December to 36% in his most recent filing.

Elsewhere in the fund, Gross remained relatively neutral on the emerging markets, which makes up 6% of the fund, while he trimmed his US credit exposure, which now stands at 9% compared with 10% last month.

The PIMCO GIS Total Return Bond fund has returned 10.5% over the three years to the end of December 2013. Its benchmark, the Barclays US Aggregate Bond TR index, rose 10.11% over the same period.

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