(Bloomberg News) Pacific Investment Management Co.'s Bill Gross said investors should embrace a defensive strategy because of the limits of zero-bound interest rates and systemic debt risk in global financial markets.

Emphasize income, de-emphasize derivate structures that are fully valued and be willing to accept returns lower than historical averages, Gross wrote today in a commentary posted on Newport Beach, California-based Pimco's website.

Gross boosted the proportion of U.S. government and Treasury debt in Pimco's $250.5 billion Total Return Fund in January to 38 percent and raised his portion of mortgage securities to 50 percent, the highest since June 2009.

Treasuries with maturities from five to seven years have been the focus of purchases with longer-term debt unattractive due to risk of a pick-up in inflation, Gross said in an interview Feb. 3 on "Bloomberg Surveillance" with Tom Keene and Ken Prewitt. The Fund increased its allocation of Treasury Inflation Protected Securities, or TIPS, to 8 percent, Gross said that day.

Pimco, a unit of the Munich-based insurer Allianz SE, managed $1.36 trillion of assets as of Dec. 31.