DoubleLine flagship fund has $2.1 bln outflow in Sept


NEW YORK, Oct 1 (Reuters) - Investors pulled $2.1 billionout of Jeffrey Gundlach's DoubleLine Total Return Bond Fund in September, the biggest-ever monthly outflow fromthe fund, data from investment research firm Morningstar showedon Tuesday.

As a firm, Los Angeles-based DoubleLine Capital LP hadoutflows of $1.7 billion from its open-end U.S. mutual funds inSeptember, the fourth straight month of outflows, Morningstardata showed.

The outflows from the DoubleLine Total Return Bond Fund camedespite the fund's strong performance this year relative to itspeers and reduced outflows from bond funds last month.Gundlach's fund is up 0.3 percent for the year, besting 95percent of its peers, according to Morningstar.

U.S.-based bond mutual funds and exchange-traded funds hadjust $214 million in outflows in September through last Friday,down from big monthly outflows over the prior three months,according to data from research provider TrimTabs.

Beginning last May, signs that the U.S. Federal Reservecould begin scaling back its $85 billion in monthly bond-buyingtriggered a selloff in the bond market and sizeable withdrawalsfrom bond funds.

Selling pressure on bonds tempered and bond fund outflowseased, however, following the Fed's Sept. 18 decision tomaintain the pace of its bond-buying. The yield on the 10-yearU.S. Treasury note plunged 17 basis points to 2.69 percentfollowing the decision. As yields fall, prices rise.

Gundlach, chief executive and chief investment officer ofDoubleLine, said in a company webcast on Sept. 26 that the Fedwas not likely to reduce its bond-buying this year givenpersistently weak U.S. economic data.

"You're going to have quantitative easing continue at itscurrent level all the way through the next Fed chairman takingover," Gundlach said. Fed Chairman Ben Bernanke's second termexpires at the end of January.

Gundlach also said the yield on the benchmark 10-year U.S.Treasury note could fall to 2.45 percent "in the weeks ahead."

DoubleLine Capital had $57 billion in assets as of June 30.The DoubleLine Total Return Bond Fund has roughly $35 billion inassets, according to Morningstar.

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