Pimco's Total Return Fund Sees Mortgage Holdings Fall In June

   DOW JONES NEWSWIRES 
 

Mortgage holdings hit a 23-month low as a percentage of assets in Pimco Investment Management Co.'s benchmark Total Return fund in June.

On a market-valued weighted basis, the $161 billion fund had 54% of its assets last month in mortgages - the last time the amount was that low was July 2007 and down from May's 61%. The percentage got as high as 86% in February as global markets remained in turmoil. Fund manager Bill Gross loaded up on mortgage-backed securities issued by federal agencies like Fannie Mae (FNM) when they were beaten down late last year but have rebounded in 2009.

Total Return's holdings of government and government-related assets - which include Treasurys along with their futures and options, agency debt and interest-rate swaps - dipped to 24% in June from 25% a month earlier. Investment-grade corporate debt was flat at 18%.

For the first half of the year, the biggest mutual fund by assets reported gains of 6.29%, smashing the 1.9% return for Total Return's benchmark, the Barclays Capital U.S. Aggregate Index. The fund rose 4.8% last year, beating some 90% of its peers.

-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; [e-mail]