Karen Maley for Business Spectator reports that PIMCO, globally the biggest bond trader, has dumped all of its investments in US government-related debt including US Treasury bonds and agency debt.
PIMCO’s founder and managing director, Bill Gross, has made little secret of his concerns that bond yields could rise sharply – and bond prices fall – when the US central bank’s $US600 billion bond buying program expires in June.
PIMCO’s flagship Total Return Fund slashed its holdings of US Treasury bonds and agency debt to zero at the end of February. A month earlier, such investments made up 12 per cent of the fund’s investments.
At the same time, the $US236.9 billion fund boosted its cash holdings. The fund held $54.5 billion in cash at the end of February, a sharp rise from $11.9 billion it held a month earlier.
This is a stunning vote of no confidence in the policies of the US central bank by PIMCO.
For the full article click on the link below.
http://www.businessspectator.com.au/bs.nsf/Article/PIMCO-Bill-Gross-bonds-Ben-Bernanke-QE2-pd20110310-ESSLW?OpenDocument&emcontent_Maley
