Pimco Holdings Of US Government Debt Surge, Its European Debt Experiment Is Now Over
Even as most asset managers experienced a devastating May, with many recording drops in AUM of -10% or worse, there is nothing that can topple the trillion+ bond giant out of Newport, which is so large it is now virtually the market in most of its product verticals. In the May performance report, of Pimco's flagship Total Return Fund, the fund's total assets grew once again, hitting $228 billion, an increase of $3.4 billion over April, and 45% higher than last year. Combing through the fund's holdings, the firm has now officially said goodbye to the "foreign developed" bond experiment, with non US developed holdings plunging by more than 50%, to just 6%, compared to 13% in April, and a high of 19% in February. The beneficiary of this adjustment were US bond holdings, which surged from 36% to 51% of all holdings, or a MOM increase of over $35 billion! This represents about a third of all (settled) US bond issuance in May. Who needs QE2 when you have Pimco. Another notable observation is that the fund is now once again acting on margin, with a -4% net cash position. The last time the fund was on margin was in October 2009. Lastly, TRS has been slowly shifting further out in duration, with holdings of 5 Year or longer maturing notes rising to 56%, compared to 51% in April, and a low of 8% in November 2008, just after the Lehman bankruptcy.