Jeffrey Gundlach’s DoubleLine Total Return Bond Fund, which has beaten 97 percent of rivals over the past three years, had its third straight month of net withdrawals as investors continued to flee bonds.
Clients pulled an estimated $1.1 billion from the $36.8 billion fund in August, according to research firm Morningstar Inc. The fund had $1.2 billion of net redemptions in June, its first monthly withdrawals since opening in April 2010, followed by redemptions of $580 million in July, Chicago-based Morningstar said.
Fixed-income fund withdrawals were triggered by U.S. Federal Reserve Chairman Ben Bernanke, who told Congress on May 22 that the central bank could start reducing its bond purchases and is prepared to begin phasing out one of the most aggressive easing programs in its century-long history later this year. Investors pulled $17.1 billion from U.S. bond funds last month through Aug. 21, according to estimates from the Investment Company Institute.
Gundlach said in an interview in April that shrinking market returns would prompt an end to the rush of investor money into bond funds, including his. Gundlach co-founded Los Angeles-based DoubleLine Capital LP in December 2009 after he was dismissed from TCW Group Inc. over a dispute.
A phone call and e-mail to Loren Fleckenstein, an analyst at DoubleLine Capital, weren’t immediately returned.
DoubleLine Total Return Bond Fund declined 0.9 percent this year, ahead of 87 percent of similarly managed funds, and has advanced 7 annually percent over the past three years to beat 97 percent of peers, according to data compiled by Bloomberg.
Morningstar estimates deposits or withdrawals for mutual funds by computing the change in assets on a monthly basis that isn’t accounted for by performance. The fund’s actual withdrawals or deposits may differ from Morningstar’s estimates because of the timing of purchases and redemptions or dividend distributions.