Gundlach's bond funds attract $11.5 billion in first half

Wed Jul 11, 2012 5:32pm EDT

CEO and CIO of DoubleLine Capital Jeffrey Gundlach speaks during the Sohn Investment Conference in New York, May 16, 2012. REUTERS/Eduardo Munoz

CEO and CIO of DoubleLine Capital Jeffrey Gundlach speaks during the Sohn Investment Conference in New York, May 16, 2012.

Credit: Reuters/Eduardo Munoz

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(Reuters) - Jeffrey Gundlach is once again proving to be the king of bonds when it comes to raising money from investors.

Gundlach's flagship DoubleLine Capital bond fund took in $11.5 billion in new money during the first half of 2012, almost as much as the next two funds combined, data from mutual fund tracking firm Morningstar shows.

The DoubleLine Total Return Bond fund, with $28.4 billion in assets, is one of the industry's fastest growing bond mutual funds. DoubleLine Capital LP manages more than $38 billion.

Vanguard's Total Bond Market Index fund ranked second in terms of inflows, taking in $6.7 billion in new money.

The industry giant, Bill Gross's PIMCO Total Return Fund fund, attracted $5.8 billion in new money. The flagship Pacific Investment Management Company fund is the world's largest bond fund with $263 billion in assets.

Overall, Morningstar reports the universe of intermediate-term bond funds took in $53.29 billion in the first-half of the year. The rush of money into bond funds comes at a time that retail investors are avoiding risk in the face of weak economic growth in the United States and continuing economic turmoil in the euro zone.

Cameron Brandt, an analyst with EPFR Global, attributes the large inflows to less investor confidence with equity markets.

"Two big blowups in the equity side over the past 10 years has accelerated their decision to move their portfolios to fixed income," he said. "There's a lot of unease out there."

Gundlach, who was bestowed the "King of Bonds" title by Barron's last year, led the first quarter as well in investor inflows. His Total Return Bond fund saw $6.4 billion in inflows during that period, which was then four times the amount Gross's fund brought in.

But in terms of performance, PIMCO's flagship fund trumped DoubleLine's.

With a gain of 5.75 percent, PIMCO's flagship fund had the best first-half returns for large bond funds. The Doubleline Total Return Fund was up 4.66 percent for the year, and Vanguard's main fund was up 2.4 percent.

Meanwhile, Angel Oak Multi-Strategy Income, a tiny $113 million fund, saw 10.8 percent increase, the biggest percentage gain for the year among funds tracked by Morningstar.

Gundlach founded DoubleLine Capital after his nasty split with former employer TCW Group Corp in December 2009. The two sued one another last year, but settled in December without disclosing terms. (Reporting by Melvin Backman; Editing by Jennifer Ablan, Matthew Goldstein and Tim Dobbyn)

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