PIMCO Cuts Holding Of US, UK Bonds

Amid hurting supply-and-demand dynamics, Pacific Investment Management Co. is slashing its holding of bonds in the U.S and U.K. as borrowing rises and declines in central-bank buying.

The company which operates the world's biggest bond fund, the Total Return Fund, is also becoming more cautious than in the past with corporate bonds, according to Pimco Managing Director Paul McCulley.

"We aren't necessarily selling credit on any scale, but we'd reduced buying, said McCulley. "Now, we're generally neutral versus the benchmark, but we believes that corporate spreads are still at levels where we see value in carefully selected high-quality credits, particularly in bank and non-bank financials and non-cyclical sectors, such as utilities and health care."

McCulley stated that the investment company is running light on risk as the current economic climate is not offering anything particularly eye-catching for Pimco to look at.

He sees varying potential economic outcomes in the new year and Pimco sees danger in staying devoted to any one strategy in particular, amid strong gains in emerging markets and slower growth in current developed countries.

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