PIMCO raises bet against U.S. government debt

NEW YORK (Reuters) - Bill Gross, the manager of PIMCO, the world's largest bond fund, raised his bet against U.S. government-related debt in April to 4 percent from 3 percent, according to the fund's website on Monday.

The increase, albeit small, follows Gross's move to ratchet up bearishness in March by taking his initial short position in U.S. government-related debt, which includes Treasuries, TIPS, agencies, interest rate swaps, Treasury futures and options and FDIC-guaranteed corporate securities.

The $240 billion Total Return fund also raised its cash position to 37 percent in April from 31 percent in March, added Pacific Investment Management Co, which oversees $1.2 trillion in assets.

The Total Return fund took down its mortgage exposure to 24 percent in April from 28 percent the previous month.

Last Friday, Gross told Reuters that the only way he would purchase Treasuries again is if the United States heads into another recession.

Since the news that Gross had turned more bearish on government debt, reflecting his growing worries over the country's fiscal deficit and debt burden, Treasury prices have been soaring.

Gross told Reuters on Friday: "Treasury yields are currently yielding substantially less than historical averages when compared with inflation. Perhaps the only justification for a further rally would be weak economic growth or a future recession that substantially lowered inflation and inflationary expectations."

(Editing by Andrew Hay, Gary Crosse)