Pimco's Gross Boosted U.S. Government-Related Holdings in October

   By Min Zeng 
 

High-profile fund manager Bill Gross boosted U.S. government-related holdings at the world's largest bond fund he runs in October amid a price rally in Treasury bonds.

The holdings, which include U.S. Treasury bonds, accounted for 37% last month at the $247.9 billion Total Return Fund at Pacific Investment Management Co., compared to 35% in September, according to data posted on the firm's website.

Mr. Gross is founder and co-chief investment officer at Pimco, which is a unit of German's financial services firm Allianz SE (AZSEY, ALV.XE).

The U.S. government-related holdings include Treasury bonds, Treasury inflation-protected securities, U.S. agency debt and interest-rate derivatives. The category is a loose proxy for Mr. Gross's appetite for U.S. government debt.

The move came as U.S. Treasury bonds posted a monthly price gain in October. Treasury bonds handed investors a total return of 0.48% in October, according to data from Barclays.

In the meantime, Mr. Gross cut exposure to U.S. mortgage-backed bonds to 34% in October, compared to 35% in September, according to Pimco.

Holdings of U.S. corporate bonds, including both investment-grade and high-yield, high-risk segments, were 10% in October, up from 9% in September.

The nondollar developed-country bonds holdings was 4% in October, the same as in September. The category includes sovereign bonds sold by the euro zone countries, the U.K. and Canada.

Emerging-market debt holdings were 6% last month, the same as in September. Money market and cash equivalents--or cash holdings--were 4% last month, compared to 6% in September.

The Pimco fund handed investors a gain of 0.93% in total return in October, outpacing 0.81% from the benchmark Barclays US Aggregate Bond Index, according to Morningstar.

The fund remains down for the year, with a loss of 1.45% as of Monday, compared to a loss of 1.89% on the benchmark index, according to Morningstar.

Write to Min Zeng at [e-mail]