PIMCO Total Return ETF (NYSEArca: BOND) had 45% of its portfolio in mortgage securities at the end of August, so the fund managed by Bill Gross is nicely positioned for the Federal Reserve’s third round of quantitative easing.
The Fed on Thursday said it will expand its bond-buying program by purchasing more agency mortgage-backed securities at a pace of $40 billion a month.
Gross oversees the massive PIMCO Total Return Fund as well as the ETF version. [PIMCO Total Return ETF Outperforms Fund, Eyes $3B Asset Mark]
Gross stands out as one of the fixed-income investors best positioned to benefit from the Fed’s latest monetary stimulus, Dow Jones Newswires reports.
The fund “is well positioned for this announcement,” Gross said in the article.
“Gross has systematically concentrated his fund on MBS [mortgage-backed securities] for months as he placed bets that the elevated unemployment rate and still tepid pace of economic recovery would push the Fed to provide additional support for the economy,” Dow Jones Newswires reported.
BOND is up 3.1% the past three months versus 1.1% for the Barclays U.S. Aggregate Bond Index, according to Morningstar.