Bill Gross, co-chief investment officer at Newport Beach-based Pacific Investment Management Co., has sold all U.S. bonds from his $236.9 billion Pimco Total Return fund, the world’s largest mutual fund.
The move last month is one of the strongest signals yet by Gross—dubbed the king of bonds—that Pimco believes the bond rally of the past 30 years has run its course.
Gross, who often is quoted for his views on the economy, questioned earlier this week who will buy Treasuries once the Federal Reserve halts its latest round of bond purchases in June.
He also has warned about U.S. deficit spending and the potential for inflation, which drag down the value of government debt and require issuers to pay bigger returns to investors.
The U.S. bond selloff by Pimco comes as the investment manager stages a push into stocks.
Pimco, which manages $1.2 trillion in investments for pension funds, insurers, corporations and others, started its first stock fund, the Pathfinder, a year ago. The fund now has $1.8 billion in investments.
The company plans to debut its second stock fund, with a focus on emerging markets, this year with more expected in coming years.
Pimco has been diversifying for decades. It began as a government bond manager, then expanded to corporate bonds, currencies, commodities and later funds that mimic stock market indexes.
The company is in the process of taking over the selling of its mutual funds from its German parent Allianz SE as the investment manager expands from bonds into stocks.
Pimco is opening a brokerage for its mutual funds in New York.
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