Pimco's Total Return Fund, the world's biggest bond fund, has dumped all U.S. government-related securities, including U.S. Treasurys and agency debt.
The move was not a surprise given Pimco chief Bill Gross's recent statements that Treasurys are over-valued.
The Total Return Fund's cash holdings had surged to $54.5 billion as of Feb. 28 from $11.9 billion at the end of January.
Bill Gross, the fund's manager who helps oversee more than $1.1 trillion as Pimco's co-chief investment officer, has often railed against U.S. deficit spending and its inflationary impact. He has advocated buying bonds with "safe," higher yields — such as corporate bonds — that can withstand possible erosion of returns by inflation.
In December, Pimco said it may start investing up to 10 percent of its assets in "equity-related" securities, such as convertibles and preferred stock, after the first quarter of 2011.
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