DoubleLine flagship fund has $2.1 bln outflow in Sept


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

As a firm, Los Angeles-based DoubleLine Capital LP had outflows of $1.7 billion from its open-end U.S. mutual funds in September, the fourth straight month of outflows, Morningstar data showed.

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

U.S.-based bond mutual funds and exchange-traded funds had just $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 Reserve could begin scaling back its $85 billion in monthly bond-buying triggered a selloff in the bond market and sizeable withdrawals from bond funds.

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

Gundlach, chief executive and chief investment officer of DoubleLine, said in a company webcast on Sept. 26 that the Fed was not likely to reduce its bond-buying this year given persistently weak U.S. economic data.

"You're going to have quantitative easing continue at its current level all the way through the next Fed chairman taking over," Gundlach said. Fed Chairman Ben Bernanke's second term expires 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 in assets, according to Morningstar.