Jeffrey Gundlach, the top- performing bond manager who built DoubleLine Capital LP into a $40 billion fixed-income shop since he co-founded the firm less than three years ago, said he may add stock funds to the lineup.
“I like the way equities are out of favor and I like doing things when they’re unpopular,” Gundlach said yesterday in a telephone interview after a presentation discussing his views on the markets and the economy. “Equities are a superior investment to bonds for an inflation hedge and I like the ability to diversify and broaden the firm.”
DoubleLine, which is based in Los Angeles and was founded by Gundlach and President Philip Barach in December 2009, oversees more than $40 billion in assets. The firm may bring in teams within a few months that could manage a mutual fund that invests in U.S. stocks and a long-short equity hedge fund, Gundlach said.
Investors have favored fixed-income mutual funds since the 2008 global financial crisis. They pulled $116 billion from U.S. stock funds in the 12 months ended July 31 while depositing $170 billion into taxable bond funds, according to data from research firm Morningstar Inc. (MORN)
Pacific Investment Management Co., which runs the world’s largest bond fund, started branching into equities almost three years ago. The Newport Beach, California-based firm offers four main stock strategies: deep value, emerging markets, dividends and long-short. Bill Gross, Pimco’s founder and co-chief investment officer, said in his September investment outlook that returns from both stocks and fixed income will be stunted.
Gundlach’s $31.9 billion DoubleLine Total Return Bond Fund (DBLTX) returned 7.2 percent this year through Sept. 10, beating 97 percent of peers, according to data compiled by Bloomberg. The fund had $1.4 billion in net deposits in July, Morningstar estimated. DoubleLine’s funds attracted $21.9 billion over the past 12 months, according to Morningstar.
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