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Pimco’s Gross Boosts Treasurys for First Time in Four Months as QE3 Looms

“Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., increased its holdings of Treasurys to 35 percent in May as yields on U.S. government securities approached record lows.

Gross raised the proportion of U.S. government and Treasury debt in the $260 billion Total Return Fund, bringing it up from 31 percent of its record asset holdings in April, Newport Beach, California-based Pimco said on its website. Holdings of mortgages dropped to 52 percent from 53 percent.

Investors should focus on debt of nations such as the U.S. and Brazil and avoid Europe until credit begins flowing again from the private sector as government solutions aren’t enough to stem the region’s debt crisis, Gross said two weeks ago. The yield on the benchmark 10-year note fell to a record low of 1.44 percent on June 1.

“We would suggest at Pimco avoiding the entire eurozone until they can come up with some type of solution which involves the private sector,” Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene on June 1. ”

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