Pacific Investment Management Co.’s Total Return Fund reduced holdings of short-term financial instruments last month, the latest nod to expectations that the Federal Reserve will raise short-term rates next year.

The holdings of the $170 billion fund, the largest actively managed bond fund, are being monitored by investors following the abrupt departure of longtime Total Return manager Bill Gross in late September. Clients pulled $50 billion out of the fund in September and October, accelerating outflows that have been hitting the fund for more than a year.