By Sam Forgione
NEW YORK, July 9 DoubleLine Capital LP, the Los
Angeles-based firm run by Jeffrey Gundlach, suffered its
first-ever monthly outflows across U.S. mutual funds of roughly
$1.45 billion in June, Morningstar said on Tuesday.
The outflows from the firm came as a selloff swept the bond
market on fears the U.S. Federal Reserve might cut its $85
billion in monthly purchases of Treasuries and agency mortgage
securities later this year. The yield on the 10-year Treasury
note has surged 100 basis points since its close of 1.62 percent
on May 2. As yields rise, prices fall.
The investor withdrawals from DoubleLine included $1.2
billion from the flagship DoubleLine Total Return Bond Fund
last month, its first-ever monthly outflows since
inception in April 2010, according to Morningstar.
Gundlach founded DoubleLine in December 2009 after a split
from TCW, where he was fired as chief investment officer. The
firm, which has roughly $57 billion in assets, launched its
first open-end funds in April.
Gundlach, DoubleLine's chief executive and chief investment
officer, said in an investor webcast on June 27 that he had kept
cash on hand in his flagship fund partly in anticipation of
"One of the reasons to have cash is, after months and months
and months of bond inflows, it has always occurred to me that
there would probably be some reversal of that at least for a
short-term period," Gundlach said.
Fed Chairman Ben Bernanke triggered the selloff in the bond
market and widespread outflows from bond funds when he told
Congress on May 22 that the central bank might reduce its
bond-buying stimulus later this year if the U.S. economy looked
The DoubleLine Total Return Bond Fund had 15 percent of its
assets in cash as of the end of May, according to the firm's
website. Bond mutual funds attracted $257.8 billion in assets
last year, the most since 2009, according to Lipper. So far this
year, the funds have gained a total of $71.7 billion.
The DoubleLine Total Return Bond Fund was down 1.74 percent
in June, marking its weakest performance since inception but
still putting it ahead of 72 percent of peers, according to
Morningstar. The fund is down 0.98 percent so far this year,
ahead of 95 percent of peers, the Chicago-based investment
research firm said.
TCW, another Los Angeles-based investment firm, suffered
outflows of $2.12 billion from its U.S. mutual funds last month,
the most since December 2009, when investors pulled $5.3 billion
from the firm following Gundlach's departure.
TCW had $130.7 billion in assets at the end of March,
according to the firm's website.
Investors pulled $745 million from the TCW Total Return Bond
Fund last month, also marking its biggest monthly
outflow since December 2009. The fund was down 2.075 percent in
June, its weakest performance since February 1996. The fund is
down 1.24 percent so far this year, ahead of 94 percent of
peers, Morningstar said.
Pimco, which suffered outflows of about $14.5 billion from
its U.S. funds in June, saw roughly $21.25 million leave its
Pimco Total Return Exchange-Traded Fund in the first
week of July, Morningstar added. The fund, which suffered its
first monthly outflows in May, suffered a total of roughly $619
million in investor withdrawals over May and June.
Pacific Investment Management Co., a unit of European
financial services company Allianz SE, had $2.04
trillion in assets at the end of March, according to the firm's
The actively-managed ETF is designed to mimic the strategy
of the flagship Pimco Total Return Fund, the world's largest
bond fund. Investors withdrew $9.6 billion from the flagship
fund last month, the most during any month on record according
The Pimco Total Return Fund, run by Pimco founder and
co-chief investment officer Bill Gross, was down 2.64 percent in
June, marking its weakest monthly performance since September
2008, Morningstar said. The fund is down 3.69 percent so far
this year, ahead of just 17 percent of peers.
In June alone, investors pulled a record $79.8 billion from
bond mutual funds and exchange-traded funds, according to
TrimTabs Investment Research. That data does not include losses
incurred by hedge funds.