Pimco, the big Newport Beach money management firm still laboring in the exit shadow of its long-time leader Bill Gross, posted online yesterday it cut its short-term holdings of financial instruments last month.
The cuts came in the firm's popular Total Return Fund once run by Gross, according to the WSJ. Many interpreted the move as a forerunner to the Federal Reserve's coming interest rate hike sometime next year.
Per the WSJ, the fund's managers said they have reduced holdings of short-dated bonds whose yields are the most sensitive to changes in Fed policy. Pimco expects the Fed to start hiking rates mid-2015, the report noted.
The report continued saying the fund has and will continue an 'underweight' holding of long-dated bonds because yields appear too "rich relative to our expectations for the future path of interest rates."
Last month the fund posted an 0.8% total return still behind the 0.98% on its benchmark, Barclays U.S. Aggregate Bond Index, Morningstar reported.
No comments:
Post a Comment