Gundlach Steers Clear of MBS REITs as Homeowners Refinance

Investors should avoid real estate investment trusts that buy U.S. mortgage-backed securities because they’ll continue to cut dividends as homeowners refinance mortgages at lower rates, said DoubleLine Capital LP’s Jeffrey Gundlach.

“I expect further dividend cuts in the quarters ahead and would avoid MBS REITS for the time being,” Gundlach, who heads the $21 billion Los Angeles-based money manager, said in an e-mailed statement.