By Sam Forgione
NEW YORK, April 1 Jeffrey Gundlach, chief
investment officer and chief executive of DoubleLine Capital LP,
said Monday that another "lost decade" in stocks is unlikely and
that lower yields on 10-year Treasury notes have made them less
Gundlach, whose firm manages over $53 billion, said on an
investor conference call that a "lost decade" in stocks is
"extraordinarily unlikely" and that investors should hope that
stocks will outperform bonds over the next 10-15 years.
Gundlach added that 10-year Treasuries, which he currently
owns in his flagship DoubleLine Total Return Bond Fund
, have become somewhat less attractive since yields
have hovered around 1.8 percent.
Gundlach purchased 10-year Treasury notes when they popped
above 2 percent in February. The T-note was up in
price to yield 1.84 percent at the close of trading on Monday.
"I certainly like them a lot less," Gundlach said, adding
that he is still "comfortable" owning them given the Federal
Reserve's purchases of $45 billion in Treasuries per month.
DoubleLine hosted the investor call to mark the launch of
the DoubleLine Equities Small Cap Growth Fund under
its equity management division, DoubleLine Equity LP. The firm,
which manages mostly fixed income assets, announced the new
division on January 2.
Brendt Stallings, one of the lead portfolio managers of the
equity division, said that the firm's move into stocks is a
"reasonable bet" given stocks' protection against inflation and
the potential for corporate growth.
"We think we're getting paid to take the additional risk of
equities," Stallings said. "It doesn't mean it'll pay off in the
next three months or twelve months," he added.
As of the end of February, the fund had about 25 percent of
its portfolio in technology companies, 20 percent in healthcare
companies, and 14 percent of its holdings in industrial
Stallings said that the technology sector offers the most
growth and the most new business among all stock sectors.