Bloomberg News

Pimco Cut Total Return Fund’s Muni Allocation to 4% in May (1)

June 11, 2013

Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., cut its stake in municipal debt to 4 percent of assets, the lowest allocation in nine months, the company said today.

The last time the Total Return Fund, valued at $285 billion (PTTRX:US) as of May 31, held such a small amount of munis was in July 2012, according to data compiled by Bloomberg. Gross directed 5 percent of assets to state and local debt from August 2012 through April.

Pimco released the latest data on its website.

Michael Reid, a spokesman for Newport Beach, California-based Pimco, declined to say why the muni allocation was reduced. Mark Porterfield, a spokesman for Gross, also had no comment.

The $3.7 trillion municipal market lost 1.3 percent in May, the worst month for returns on the tax-exempt securities since December, according to Bank of America Merrill Lynch data. For the year through June 10, the decline was 0.45 percent, compared with a 1.5 percent loss for Treasuries, the indexes show.

Pimco’s Total Return Fund lost (PTTRX:US) 1.25 percent this year through June 10, beating 28 percent of its peers, according to data compiled by Bloomberg. In the past five years, it has earned about 7.8 percent, topping 94 percent of peers.

To contact the reporter on this story: Michelle Kaske in New York at

To contact the editor responsible for this story: Ted Bunker at

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