Pimco, the bond fund manager that is part of German insurer Allianz, has bought more than $5bn (€3.5bn) in mortgage-backed securities, indicating the manager believes price declines on the assets may have bottomed out, ahead of the launch of its distressed fund.

Speaking to Financial News last week, Bill Gross, Pimco chief investment officer, said he would buy up to an additional $2bn of the the securities in the coming weeks.