Bill Gross- Follow the money

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., reduced holdings of mortgage debt last month and added to cash and equivalent securities.

Gross cut the $161 billion Total Return Fund’s investment in mortgage bonds to 54 percent of assets, the lowest in almost two years, from 61 percent in May, according to a report on Pimco’s Web site. Gross trimmed holdings of government-related bonds to 24 percent of assets, the least since February, from 25 percent.

In an investment outlook published earlier this month, Gross said investors should look for “secure income” offered by bonds and dividend-paying stocks. “The outlook for risk assets -- stocks, high-yield bonds, and commercial and residential real estate will involve just that -- risk,” he said in the July 1 report.

The Total Return Fund returned 10.9 percent in the past year, beating 97 percent of its peers, according to data compiled by Bloomberg.