Bill Gross is launching a new version of his PIMCO Total Return Fund that will rely less on derivatives and leverage, Bloomberg reports. The PIMCO Total Return Fund IV, which will forgo high-yield debt, borrowing to create leverage and investing in options, will seek to limit exposure to interest rate swaps and credit default swaps. The new fund, which will hold only investment-grade securities, cannot have over 15% of total assets invested in securities denominated in foreign currencies. It may not invest in options and cannot borrow to create leverage, though it can take out temporary loans equaling 10% of assets to meet redemptions or for emergency purposes.

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