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Coming To America: PIMCO's Total Return Fund Rotates Out Of Europe

Tyler Durden's picture




 

The April update for Pimco's Total Return Fund is out. The credit fund, which is now a quarter of a trillion juggernaut, clocking in at $224.5 billion, or $5 billion more than March, and 50% more than the $150 billion last April, has rotated aggressively out of non-US developed holdings (i.e. Bund and other exposure), and put the money back into the US. Total European holdings declined from $40 billion, or 18% of holdings, to $29 billion, or just 13%. At the same time, US holdings increased from 33% to 36%, or a $8 billion increase to $81 billion.Not too surprisingly, mortgage holdings are a scant 16% of holdings, compared to 86% in February of 2009. Is Pimco's European experiment over? Yet another bad sign for Bunds, which Pimco did a whirlwind tour pitching in early 2010 after it had established a position.

 

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Wed, 05/19/2010 - 13:32 | 361106 Dicite justitiam
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I think it's larger than $0.25T when you include TR2 and TR3.  More like $0.4T or so.  Not 100% sure that the mandate is identical among all three but they do have the same name...

Wed, 05/19/2010 - 13:36 | 361114 Deflationburger...
Deflationburger with Fleas's picture

TR2 is US only.  TR3 is socially responsible.  Or the other way around, but they have different mandates.

Thu, 05/20/2010 - 09:50 | 362871 Dicite justitiam
Dicite justitiam's picture

thanks.  I checked and TR1 is pushing .4T by itself at the end of last quarter.

Wed, 05/19/2010 - 13:38 | 361118 Dreamwalker420
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If your looking for an elephant to follow other than Berkshire ...

Wed, 05/19/2010 - 13:47 | 361140 carbonmutant
carbonmutant's picture

Do we assume the Blue line represents Treasuries?

Wed, 05/19/2010 - 13:49 | 361144 Mercury
Mercury's picture

They're running out of places to hide.  I know they like Canada but there's only so much of that debt they can take down. How much will they be willing to park in cash and will they weight corprates to UST's more than they ever have?

Wed, 05/19/2010 - 13:50 | 361146 mtguy
mtguy's picture

Hard to argue with the results of Bill Gross over the years.  Gotta like a guy who lived out of his car for a while and now is a gazillionaire, without ever being in the gov't or goldman.

 

Wed, 05/19/2010 - 13:51 | 361148 BlackBeard
BlackBeard's picture

Who left Chris "Double Penetrated" Dodd in charge of this shit!?

http://www.bloomberg.com/apps/news?pid=20601087&sid=a81ubIM5J1Xw&pos=2

Wed, 05/19/2010 - 14:01 | 361165 Deflationburger...
Deflationburger with Fleas's picture

They were moving to a more nuetral to underweight position in corporates at the end of April.  Liked exposure to European interest rates and also like Brazil and other EMs.  Also still like corporate debt in the financial sector, I am assuming due to the implicit government gurantee.

 

I've met Bill Gross in person and you will never meet another individual in this industry that is that unassuming and gracious.  Especially one of that calibur.  It was very jarring, but in a good way.

Wed, 05/19/2010 - 14:21 | 361209 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Pimco makes moves right on time like clockwork.  Their next move will be to move out of UST and back into Europe, the whole while seeking more corperate exposure.  Slowly the blackhole turns to human eyes.  It is almost frozen in time.

Wed, 05/19/2010 - 14:54 | 361316 buzzsaw99
buzzsaw99's picture

it's the chicken and the egg with pimpco and the euro (& german bunds). Did they pull out because of weakness or by pulling out did they create a vacuum? either way i say ha ha.

Wed, 05/19/2010 - 15:36 | 361441 youngandhealthy
youngandhealthy's picture

Well, to me it looks like they swapped the MBSs for UST with the FED/USGov...thats a bailout. Recently they got the FX swap in place with FED/ECB and then they dumped the euro holding. Skill? Timing? Luck? Duration adjustment?...no way Jose

Wed, 05/19/2010 - 21:34 | 362060 Madhouse
Madhouse's picture

They are the Buy side Goldman. Ok, simple. Do the opposite they advise, because that is what they are doing..

Wed, 05/19/2010 - 23:00 | 362210 Grand Supercycle
Grand Supercycle's picture

 

EURUSD buying support is still evident.

Daily chart is now extremely oversold, will post a chart soon.

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Wed, 05/19/2010 - 23:06 | 362215 Hunch Trader
Hunch Trader's picture

They're executing the "out of public debt into private equity" trade.

Wed, 05/19/2010 - 23:11 | 362228 Ragnar Danneskjöld
Ragnar Danneskjöld's picture

get ready for the "talk your book" cnbc pump and dump courtesy of gross and el-erian.  

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