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Bill Gross piles into mortgage-backed securities
by Chris Sloley on Oct 12, 2011 at 11:48
Veteran bond manager Bill Gross has offered a major sign of support for once toxic mortgage-backed securities by upping exposure to the asset class in his $245 billion Total Return Bond fund.
The September update for the Pimco Total Return Bond fund shows increased exposure to mortgage-backed securities, which rose from 32% in August to 38% in September.
The reputation of mortgage-backed securities took a hammer blow when the housing bubble burst in 2008 resulting in a federal take-over of Fannie Mae and Freddie Mac.
However Gross’ increased stake marks a trend among fund managers to revisit the asset class.
Other changes in Gross’ portfolio exposure for September saw him increase sector allocation in the emerging markets from 12% in August to 13% in September, as well as hiking exposure in non-US developed markets by 2%, from 18% to 20% for the month.
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