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Bill Gross Raises Holdings of US Treasuries to 6-Month High

Bill Gross raised the percentage of Treasuries held in his flagship fund to 30 percent in January, the most since July, after advising investors to purchase five-year Treasuries and inflation-indexed debt amid global monetary-policy concerns.

The world’s biggest manager of bond funds increased the proportion of U.S. government and Treasury debt in Pacific Investment Management Co.’s $285.6 billion Total Return Fund from 26 percent of assets in December, according to a report on the company’s website. Mortgages remained the largest holding even as the percentage was reduced to 37 percent, the lowest since August 2011. It held 42 percent in December.

Newport Beach, California-based Pimco doesn’t comment directly on monthly changes in its portfolio holdings.

Investors should buy Treasury five-year maturities and avoid longer-term bonds, which reflect future inflation, Gross said in a Twitter post on Friday, adding that economies are too highly levered for any central bank to raise interest rates for years.

Investors should protect their holdings with inflation-linked bonds as the Federal Reserve’s quantitative-easing stimulus strategy of buying assets will ultimately fuel inflation, Gross said in an interview on Bloomberg Television on Feb. 4.

Holdings CategoriesThe Total Return Fund kept its holdings of non-U.S. developed nations’ debt steady at 12 percent in January. Gross also kept the fund’s emerging-market debt at 7 percent, the same amount it held in December, and its municipal-bonds holding remained unchanged at 5 percent. The fund’s investment-grade credit holdings dropped to 9 percent in January, from 10 percent the previous month.

High-yield debt remained steady at 2 percent.

The Total Return Fund gained 10.4 percent in 2012, beating 95 percent of its peers, according to data compiled by Bloomberg. Treasuries returned 2.2 percent last year, according to Bank of America Merrill Lynch indexes.

The Pimco fund’s government and Treasury debt category includes fund holdings of U.S. Treasury notes, bonds, futures and inflation-protected securities.

Pimco, a unit of the Munich-based insurer Allianz SE, managed $2 trillion in assets as of 31 December.