Bill Gross kept U.S. government-related holdings steady while
cutting mortgage-backed securities in the Pimco Total Return Fund
in April as U.S. fixed-income markets strengthened broadly in
April.
Meanwhile, Mr. Gross boosted holdings of U.S. corporate bonds,
emerging-market holdings and sovereign bonds sold by developed
nations outside the U.S. last month, according to the latest data
available from Pacific Investment Management Co.'s website Friday
afternoon.
Investors are keeping a close eye on Pimco funds' performances,
flows and asset allocations following a year of record redemptions
and a recent management shake-up. Mohamed El-Erian abruptly quit as
Pimco's chief executive earlier this year amid tension with Mr.
Gross.
Mr. Gross is Pimco's co-founder and chief investment officer.
Total Return is the world's largest bond fund, with $230.4 billion
assets under management.
Mr. Gross allocated 41% of the fund's investments to U.S.
government-related holdings at the end of April, unchanged from the
end of March. The holdings include Treasury bonds, Treasury
inflation-protected securities, Treasury futures and derivatives
linked to the U.S. government debt market.
The Pimco fund allocated 19% of its investments to
mortgage-backed securities at the end of April, down from 23% a
month earlier.
Holdings of U.S. corporate bonds, including both
investment-grade debt and junk bonds, rose to 12% at the end of
April, from 10% a month earlier.
Emerging-market holdings rose to 7% in April from 6%.
Non-U.S. developed-country holdings, which include sovereign
debt sold by euro-zone countries and the U.K. and Canada, ticked up
to 11% at the end of April, compared with 10% in March.
Mr. Gross's fund had $3.1 billion in outflows last month, the
12th straight monthly outflow, according to Morningstar.
The fund has been a laggard this year. It posted a total return
of 2.58% this year through Thursday, trailing 81% of its peers,
according to Morningstar. In April, the fund returned 0.74%,
compared with a gain of 0.84% by its benchmark--the Barclays U.S.
Aggregate Bond Index.
The fund has benefited from price gains in the broad U.S.
fixed-income markets this year, but its concentration on
shorter-dated bonds has hurt performance because longer-dated bonds
have led the rally in 2014.
Write to Min Zeng at min.zeng@wsj.com
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