The yield on the benchmark 10-year U.S. Treasury rose about 27 basis points in December and topped 3 percent on December 27, a 2-1/2-year high. Bond yields move inversely to prices. The selling pressure came in the wake of the U.S. Federal Reserve's announcement on December 18 that it would cut its monthly stimulus by $10 billion starting in January.

Investors pulled a record $41.1 billion from Gross's fund last year on the negative performance, even though his fund was not alone in suffering losses.

The Barclays U.S. Aggregate bond index, the benchmark by which many U.S. funds gauge performance, fell more than 2 percent in 2013 to mark its first annual loss since 1999 and its biggest decline since 1994.

Gross's increase to U.S. government-related securities came after Gross has recommended short-dated bonds on the belief that the Federal Reserve will keep short-term interest rates low until at least 2016.

In his monthly letter to investors released Thursday, Gross said that the Fed would not hike short-term rates given the low inflation.

"At the moment, the Fed's fork or target for PCE inflation is 2.0 percent or higher while December's annualized rate was only 1.2 percent," Gross said. Gross called the PCE annualized inflation rate "the critical monthly statistic for analyzing Fed policy in 2014."

The Fed has kept the key Federal funds rate between 0-0.25 percent since late 2008 to help the economy recover from recession, and has promised to keep it there for a while longer, probably until 2015.

The Pimco Total Return fund kept unchanged its holdings of U.S. credit at 10 percent, emerging markets at 6 percent, and "other" securities at 4 percent.

First « 1 2 » Next