Canadian Investment Review

PIMCO Dumps US Bond Holdings

Written by Caroline Cakebread on Thursday, March 10th, 2011 at 9:41 am

772412_bubblesManagers have been worried about a bond bubble for months – the latest news from PIMCO could mean things are about to get a lot worse.

Pensions and Investments is reporting that PIMCO’s $237 billion Total Return Fund sold all its U.S. government bond holdings last month. The portion of the fund in Treasuries and U.S. government-related paper was at zero as of Feb. 28, from 12% a month before. Mortgage-related holdings, meanwhile, dropped to 34% from 42%, while net cash and equivalents surged to 23% from 5%.

Indeed, PIMCO chief Bill Gross has been calling for a fixed income moment of truth, as US government stimulus begins to recede and we see whether or not their aggressive policies have in fact been successful (or not).

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