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.
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.