Pimco’s Gross Turns Bullish on US Treasuries
In stark contrast to most pundits, the world’s biggest bond fund manager Bill Gross has had a change of heart on Treasuries, raising allocations to U.S.government bonds, as the fund seeks to pre-empt an increase in buying from Japanese investors.
The PIMCO Total Return Fund, which has $289 billion in assets, increased its allocation to Treasuries to 33 percent in March from 28 percent the previous month, the firm’s website showed on Tuesday. The fund also decreased its exposure to mortgage bonds from 36 to 33 percent.
Gross said he had turned positive on Treasury bonds maturing in 10 years because the Bank of Japan’s aggressive monetary stimulus plan would drive Japanese investors to seek higher returns in overseas markets.