Pimco cuts US govt-related debt holdings

New York

PIMCO slashed its holdings of US government-related debt in its flagship Pimco Total Return Fund by almost two-thirds in May from the prior month, the firm reported on its website on Tuesday, as it braces for the Federal Reserve to hike interest rates.

Pacific Investment Management Co, which is known as Pimco and is a unit of Germany's Allianz SE, said the Total Return Fund's holdings of US government-related debt fell to 8.5 per cent in May, down from 23.4 per cent in April. The US$107.3 billion fund, which lost its crown as the world's biggest bond fund in April to the Vanguard Total Bond Market Index Fund, held as much as 35.3 per cent of US government-related holdings in February.