PIMCO's MBS Purge Continues As Foreign Bond Holdings Hit Record, Cash Rules
The latest data released by PIMCO's Total Return Fund indicates that the firm's flagship fund added another $8 billion in AUM, which at January 31 stood at $210 billion. This is a $74 billion increase in AUM compared to January 2009. More importantly, the composition of TRF demonstrated that the recent trend away from MBS and Treasuries and into cash and non-USD denominated foreign bonds persists. Gross has now booked $88 billion in profits in MBS since QE started, which brings his MBS holdings to an all time low of $31 billion. All the extra cash has gone into foreign non-US denom bond holdings, which hit a new high of $38 billion, presumably mostly in Bunds, Brazilian and Russian Sov holdings, and, well, cash, which at $19 billion hit the highest level since June 2008.
The market-weighted maturity profile of holdings was little changed: a slight increase in the "under 3 year" maturities was offset by a decline in the 3-5 year bracket.