Bill Gross Used $45 Billion Derivatives to Lift Fund Gain
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Bill Gross is relying on derivatives rather than Janet Yellen to raise his returns on government bonds.
The co-founder of Pacific Investment Management Co. sold most of the $48 billion of U.S. Treasuries held by his $221.6 billion Pimco Total Return Fund in the second quarter, replacing them with about $45 billion of futures, according to an August filing. The contracts require small up-front payments, freeing up money for Gross to invest in higher-yielding securities including Brazilian, Spanish and Italian debt.