UPDATE 2-Gundlach's DoubleLine Capital sees 3rd straight month of inflows

Thu May 1, 2014 6:21pm EDT

(Adds March inflow figures and Pimco's latest flow data)

By Jennifer Ablan

NEW YORK May 1 (Reuters) - Jeffrey Gundlach's DoubleLine Capital said on Thursday it had $442.5 million of net inflows into its open-end funds for April, the third consecutive month of new cash for the Los Angeles-based firm.

So far this year, the DoubleLine Funds have seen $929 million of net inflows, the firm said. For its part, Gundlach's flagship DoubleLine Total Return Bond Fund had about $320 million of inflows for the month, according to DoubleLine.

The DoubleLine Total Return is posting returns of 3.1 percent year-to-date, surpassing the benchmark Barclays U.S. Aggregate Bond Index which is posting returns of 2.7 percent.

Gundlach, who as co-founder and chief investment officer at DoubleLine helps oversee $49 billion in assets, is widely followed for his calls including his investment bet earlier this year that Treasuries were undervalued relative to other sectors.

The yield on the 10-year Treasury note is currently at 2.61 percent, down from around 3 percent at the start of the year. Bond yields move inversely to their prices.

"I continue to believe that there is more deflation in the world than most people appreciate," Gundlach said last month at DoubleLine's annual New York investor event. "We will see potentially a deflationary scare again," he added.

In March, the DoubleLine Total Return had $263.8 million of inflows and $441.2 million of net inflows into all of its open-end mutual funds, the firm added.

DoubleLine's consecutive inflows comes after a management shakeup and months of investor outflows at Newport Beach, California-based Pimco. Earlier this year, Mohamed El-Erian, long seen as heir apparent to Pimco co-founder Bill Gross, stunned the fixed income investor community by announcing his departure.

The Pimco Total Return Fund continued to see investors flee with $3.1 billion pulled in April, its 12th straight month of outflows from the world's largest bond fund run by Gross.

The Pimco Total Return Fund has now seen a total of $55.26 billion in net outflows since last May, according to Morningstar data on Thursday. The Pimco Total Return Fund had $230 billion in assets under management at end of April, down from a peak of $292.9 billion in April 2013.

Ron Redell, the president of DoubleLine Funds, said: "We are pleased that we continue to attract significant investor demand into not only the DoubleLine Total Return Bond Fund but more broadly into our overall mutual fund complex."

"I believe the continued strong demand for our investment strategies are attributed to our consistency in portfolio management personnel and a successful long-term track record focused on risk management and performance," Redell said.

Gundlach was anointed "Bond King" in early 2011 by Barron's magazine and awarded money manager of the year in 2013 by Institutional Investor magazine. (Reporting By Jennifer Ablan; Editing by Tom Brown, Bernard Orr)