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Friday, August 26, 2011

“I want fear” says TOP bond manager

"Jeffrey Gundlach’s DoubleLine Capital LP is favoring cash over almost all investments including corporate bonds, wagering that relative yields will widen even after expanding to the most since October 2009.

“I want fear,” Gundlach, the founder and head of Los Angeles-based DoubleLine, said in an Aug. 24 telephone interview.

 “I want to buy things when people are afraid of it, not when they think that it’s a gift being handed to them,” he said of speculative-grade bonds.

Some of DoubleLine’s funds, which usually don’t hold any cash, currently are allocating 15 percent, said Gundlach, who managed the top-rated intermediate-term U.S. bond mutual fund for 15 years.
DoubleLine’s Multi-Asset Growth fund, which can invest across asset classes
and market sectors, holds 30 percent in cash, he said.

DoubleLine has attracted about $14 billion since its December 2009 inception. Gundlach previously co-managed the TCW Total Return Bond Fund (TGLMX) with Philip Barach. Gains averaged 7.5 percent annually in the five years ended Dec. 4, 2009, which compares with 7 percent for the Total Return Fund run by Bill Gross of Newport Beach, California-based Pacific Investment Management Co., the world’s largest bond fund. Barach is also at DoubleLine."

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