Asset management firm Pacific Investment Management Co. (Pimco) CEO Bill Gross has altered the investment strategy of his $242 billion Total Return Fund after a bearish decision on the U.S. Treasury market boomeranged, Financial Times reports. Gross has raised exposure to mortgage-backed securities (MBS) on the fund to 38 percent of the portfolio. Short-term securities have been sold and long-dated bonds purchased, increasing holdings of mortgage-backed securities to 38 percent from 32 percent in August. Gross has allocated 6 percent of cash to the asset class last month, 2 percent to non-U.S. developed bonds, 1 percent to emerging market bonds and 1 percent to liquid swaps, adds Investment Week.

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