Bill Gross once again puts weight behind treasuries

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Economist Peter Perkins last week said there was ‘nothing left for bonds’, but, in his most recent market update, Bill Gross has shown his support for the asset by adding 4% to his treasuries exposure.

According to the October factsheet for his $281 billion PIMCO Total Return Bond, T-bills now account for 24% of the fund, which is an increase on the 20% allocated at the end of September.

With the increase comes a gradual trimming of his exposure to mortgage-backed securities – a position he had built up to account for 52% of the fund in July of this year.

Gross has begun to make systematic cuts to this asset class over the past few months. His allocation to MBS falls from 49% of the fund at the end of September to 47% in the most recent data.

Elsewhere, Gross has also slightly reduced his allocation to investment grade credit, which falls from 12% at the end of September to 11% at the end of October.

This is while also enacting a 1% increase in high yield credit, which now accounts for 3% of the fund.

How much Gross allocates to government treasuries has been of keen interest ever since the outspoken investor dumped all of his treasury holdings in March 2011.

At the time, many market commentators had suggested, in taking this stance, Gross was pre-empting government intervention in the bond market.