Gross exits US treasuries, boosts cash

Pimco's Bill Gross has completely exited US treasuries on the £146bn Total Return fund, in favour of cash.

The manager and CIO says bond yields will rise as the Federal Reserve nears the end of QE2. This will hit the value of the bonds as their price moves inversely to their yields. This is the first time since early 2008 Gross has cut all exposure to US government-related debt and follows several warnings on rising yields, which will be needed to attract buyer interest, reports the Financial Times. In late 2009 the fund held as much as 63% in US treasuries but this was cut to 12% in January this year, before the recent cull brought exposure to zero. Remaining positions on the fund are ...