The new Pimco managers of the world’s largest bond fund are embracing the mortgage securities that Bill Gross shunned.

Scott Mather, who replaced Gross as one of the portfolio managers of the Pimco Total Return Fund, has been buying government-backed bonds, helping boost its total mortgage allocation to 30 percent on Jan. 31 from 20 percent in September. Before he left Pacific Investment Management Co. that month, Gross had been reducing his holdings of MBS, even as agency securities had their best performance last year since 2011.

Pimco Total Return’s managers -- Mather, Mark Kiesel and Mihir Worah -- are trying to improve performance after investors withdrew more than $100 billion from the fund last year. They’re buying agency mortgage securities to bring the fund’s allocation more in line with its index even as BlackRock Inc. and Western Asset Management Co. sell the bonds in anticipation of more volatility and prepayments in 2015.

“They’re moving more neutral, which means they expect agencies to perform better than what the fund’s prior thoughts were,” said Todd Rosenbluth, director of mutual-fund research for S&P Capital IQ in New York.

The Pimco fund, a staple in the 401(k) plans of millions of Americans, has advanced 0.9 percent this year, beating 92 percent of peers, according to data compiled by Bloomberg. In 2014, the fund’s returns trailed more than half of its peers as well as its benchmark index, the Barclays U.S. Aggregate.

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Mather, who early in his career worked as a trader specializing in mortgage bonds at Goldman Sachs Group Inc., said the fund had sold agency MBS in anticipation of lower prices following the Federal Reserve slowing its asset purchases and its impending rate hike.

“It is relatively unusual for us to own as little agency MBS as we have had,” Mather, 46, who joined Newport Beach, California-based Pimco in 1998, said in an e-mail. “To some extent we have reduced our underweight by buying select agency mortgages.”

While the Pimco fund’s allocation to agency mortgage bonds has increased, it still holds fewer of them than the Barclays index. BlackRock and Western Asset Management had held more or about the same amount of the securities than the index last year and have been selling the them since the fourth quarter. The Pimco fund has a bigger allocation to mortgage securities that aren’t backed by the government than the index.

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