Pimco's Total Return Fund increased holdings of U.S.
government-related debt and mortgage-backed securities in November
as prices of Treasury bonds strengthened.
The holdings of the $162.8 billion fund, the world's largest
actively managed bond fund, are being monitored by investors
following the abrupt departure of longtime Total Return manager
Bill Gross in late September. Clients pulled nearly $60 billion out
of the fund between September and November, adding to the outflows
that have been hitting the fund for more than a year.
U.S. government-related holdings accounted for 37% of the fund
at the end of last month, compared with 35% at the end of October,
according to data available Tuesday afternoon on Pacific Investment
Management Co.'s website.
The Pimco fund's U.S. government-related holdings include
Treasury bonds, Treasury inflation-protected securities, Treasury
futures and derivatives linked to U.S. government debt
securities.
Prices of U.S. government bonds rallied in November and the
yield on the benchmark 10-year note fell by 0.17 percentage point
to 2.169%. Yields fall as prices rise.
The fund's holdings of mortgage-backed bonds was 23%, compared
to 22% at the end of October.
In contrast, holdings in developed countries other than the
U.S., which include sovereign debt sold by euro-zone countries and
the U.K. and Canada, fell to 6% at the end of November from 12% in
October.
The fund held 46% in cash-equivalents assets, which include cash
and other short-term investments, unchanged from October.
Mr. Gross surprised the investing world on Sept. 26 when he
announced his departure from Pimco, which he co-founded in 1971,
following a year of heavy outflows from the Pimco flagship bond
fund and a fight with his former chief executive and heir
apparent.
The fund suffered $27.5 billion in net outflows in October,
which followed $23.5 billion of net redemptions in September. But
last month, the outflow slowed to $9.5 billion as the fund's
performance improved.
The Pimco fund posted a total return--including price changes
and interest payments--of 1% in November, beating 99% of its peers,
according to data from Morningstar.
The fund's 4.67% return through Monday in 2014 lagged behind
5.5% return on the benchmark index--the Barclays U.S. Aggregate
Bond Index and trailed 66% of its peers, according to
Morningstar.
The fund maintains a solid long-term track record. Its
annualized average return over the past 15 years through Monday was
6.74%, beating 96% of its peers.
Write to Min Zeng at min.zeng@wsj.com
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