Bill Gross is making some moves. After tweeting Tuesday that the U.S. was “getting closer” to QE3, Gross, who runs the world’s biggest bond fund, cut his holdings of emerging-market debt to a two-year low. He based the sales on areas in which the International Monetary Fund says growth will slow.
Bloomberg reports Gross reduced the securities to 7% of assets in that fund, PIMCO’s Total Return Fund, in April from 10% in March, citing the Newport Beach, Calif.-based company’s website. He trimmed investment-grade bonds to 13% from 14%. Treasuries were 31% of holdings, versus 32% in March.
The news service cited an April IMF forecast that growth in emerging economies will slow to 5.7% in 2012 from 6.2% in 2011. “Tumbling Treasury yields have led investors to look for more attractive rates, spurring a 9% gain this year for a Bank of America Merrill Lynch index of emerging-market sovereign and company bonds,” the report said, adding that Gross said the economy needed more Federal Reserve stimulus for the rally in “risk” assets to continue.
“Risk markets need more ammo if they are to stay up,” Gross said Tuesday on Twitter.