By Min Zeng
Pimco's Total Return Fund, the world's largest bond fund, cut
U.S. government-related debt holdings at the end of September amid
an abrupt departure of the fund's famed manager, Bill Gross.
U.S. government-related holdings accounted for 38% of the $201.6
billion bond fund at the end of last month, compared with 41% at
the end of August, according to data available late Thursday 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.
The fund's holdings of mortgage-backed bonds was 20%, unchanged
from August. Emerging-market holdings ticked up to 10%, from 9% in
August. The fund held 53% in cash-equivalent assets.
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.
Investors are keeping a close eye on the asset allocation
because any significant changes could affect prices of some
financial assets given the fund's massive size. One worry following
Mr. Gross's exit has been whether Pimco needs to sell holdings to
meet cash outflows from clients.
Investors withdrew a net $23.5 billion from the Pimco Total
Return Fund last month.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires