The $125bn (€79bn) fund managed by Bill Gross, one of the world's most influential fund managers, has reported its largest exposure to mortgage securities since 2000, suggesting he believes the bottom in high grade securities has passed.

The Pimco Total Return Fund, which is managed by Pimco chief investment officer Gross, held 59% of its assets in mortgage securities at the end of March, according to fund data published on Pimco's website. Its mortgage holdings were up from 47% at the end of last year and 23% in March 2007.