BIG Slide Begins: World's Biggest Bond Fund leads the way

Pimco bond fund eschews U.S. debt

Attention all bond investors: In May, Bill Gross, manager of the world's biggest bond fund, cut holdings of U.S. Treasury securities and agency debt to their lowest levels in four years as the U.S. Federal Reserve raised interest rates at a 16th consecutive policy meeting.

Gross, chief investment officer at Pacific Investment Management Co. in Newport Beach, California, reduced his Total Return Fund's holdings of Treasury bonds and securities sold by government-chartered Fannie Mae and Freddie Mac for a seventh straight month. Holdings of U.S. debt dropped to 6 percent in May, the fund's lowest amount since April 2002, from 7 percent in April, according to Pimco's Web site.

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