The world's top bond fund has dumped US government debt - so should you

The world's biggest and most successful bond fund has ditched all its US government-related debt. Bill Gross, manager of the $237bn Pimco Total Return fund, had warned recently that the fund was getting out of US Treasuries. When the latest batch of quantitative easing (QE2) ends in June, he reckons yields could rise substantially (ie bond prices will fall). So it's not a huge surprise. But it's still quite a headline-grabber. I realise that many investors are more comfortable relating to the world of equities. For sake of comparison, this is a bit like reading that Neil Woodford is selling out of all UK stocks because he thinks prices will fall. You might not agree with him. But how comfortable would you feel staying in the market, knowing that such a smart investor was getting out? Of course, that could be part of Gross's game plan…