Bill Gross
made a notable cut on his stocks of Treasury bonds in August while
questions arose about the market's value amid historically low yields.
Mr. Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., reduced holdings of Treasury bonds to 21% at the end of last month from 33% at the end of July, according to data available from the company's web site Wednesday afternoon.
The holdings at the $272.5 billion Total Return Fund fell from this year's peak of 35% in May and June. It is also much lower than 36% on the benchmark Barclays U.S. Aggregate Bond Index, suggesting Mr. Gross held an underweight stance on Treasury bonds.
The reduction came as debate increased among investors about the fortune of Treasury bonds.
Bond bulls believe Treasury yields, which move inversely to their prices, could still go lower on the prospects that the Federal Reserve may buy more Treasury bonds to stimulate the economy. Yet bears argue that Treasury yields would rise as central banks' monetary stimulus would sap demand for safe assets. Besides, Treasury yields are unattractive at these low levels.
The benchmark 10-year note's yield traded at 1.765% Wednesday afternoon, up from a record low of 1.38% set in late July.
Read more: http://online.wsj.com/article/SB10000872396390443884104577648022239510672.html
Mr. Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., reduced holdings of Treasury bonds to 21% at the end of last month from 33% at the end of July, according to data available from the company's web site Wednesday afternoon.
The holdings at the $272.5 billion Total Return Fund fell from this year's peak of 35% in May and June. It is also much lower than 36% on the benchmark Barclays U.S. Aggregate Bond Index, suggesting Mr. Gross held an underweight stance on Treasury bonds.
The reduction came as debate increased among investors about the fortune of Treasury bonds.
Bond bulls believe Treasury yields, which move inversely to their prices, could still go lower on the prospects that the Federal Reserve may buy more Treasury bonds to stimulate the economy. Yet bears argue that Treasury yields would rise as central banks' monetary stimulus would sap demand for safe assets. Besides, Treasury yields are unattractive at these low levels.
The benchmark 10-year note's yield traded at 1.765% Wednesday afternoon, up from a record low of 1.38% set in late July.
Read more: http://online.wsj.com/article/SB10000872396390443884104577648022239510672.html
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