Pimco Manager Buys Treasury Notes

Bill Gross, manager of the world’s biggest bond fund, said his firm bought five- and 10-year U.S. Treasury notes after a two-day tumble pushed yields up to levels he considered attractive.

“It’s not anything other than an obvious statement to say the market’s better valued today than it was a few weeks ago,” Gross, chief investment officer at Pacific Investment Management Co. in Newport Beach said Thursday. “For companies like Pimco that have been pretty short the market, it’s an opportunity to get some of that back, and we’ve been doing some of that.”

Investors who are short have positions that would benefit from a drop in debt prices or fare better than their benchmark indexes. Pimco, a unit of Allianz, Europe’s largest insurer, manages about $445 billion.

The 10-year note’s yield, which moves inversely to its price, hit 4.52% on Wednesday, the highest since July 30 and up from about 4% a month ago, amid concern commodity prices near record highs will lead to faster inflation. The five-year note’s yield hit 4.15%, the highest since June 2002.

Pimco bought “a billion or two” dollars worth of five-year notes Wednesday after the government sold $15 billion in an auction and bought 10-year notes Thursday, Gross said.

Pimco continues to hold fewer Treasuries than its benchmark indexes on the view that accelerating inflation may push yields higher, Gross said.