Bill Gross Increases His Bet Against U.S. Debt

“Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., increased his bet against U.S. government debt in April just as Treasurys had their biggest rally in eight months.

Pimco’s $240.7 billion Total Return Fund had minus 4 percent of its assets in government and related debt, versus negative 3 percent in March. Cash and equivalents, the largest component, rose to 37 percent of holdings from 31 percent. Mortgage bonds declined to 24 percent from 28 percent, the Newport Beach, California-based company said on its website.

Gross, 67, has been warning that the threat of inflation will be bad for Treasurys even as other investors snapped up the securities. U.S. government debt returned 1.15 percent in April, the most since August, according to Bank of America Merrill Lynch data. Yields will stay low, Jim Caron, the New York-based global head of interest-rate strategy at Morgan Stanley, wrote in a report.”

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