The Bill Gross-managed Pimco Total Return fund reaped a $1.7bn (£964m) payday following the US government's takeover of home loan groups Fannie Mae and Freddie Mac.

While shareholders in Fannie and Freddie suffered deep losses, the world's biggest bond fund on Monday had its highest one-day rise against its benchmark index, benefiting from the huge bet made by Mr Gross on mortgage bonds issued by the agencies.