(Adds analyst comment and performance of rival fund)
By Jennifer Ablan
NEW YORK Aug 1 Jeffrey Gundlach's DoubleLine
Funds had net inflows of $603 million in July, with its flagship
DoubleLine Total Return Bond Fund attracting net
inflows of $375 million.
DoubleLine Capital, based in Los Angeles, said on Friday its
DoubleLine Total Return Bond Fund ended July with net inflows
totaling $1.9 billion so far this year, and more than $2.7
billion of net inflows into DoubleLine open-end funds.
The DoubleLine Total Return Bond Fund is posting returns of
4.46 percent year-to-date, surpassing the benchmark Barclays
U.S. Aggregate Bond Index which is returning 3.66 percent. The
DoubleLine fund is surpassing 77 percent of its peer category so
far this year, according to Morningstar data.
The sixth straight month of net inflows into DoubleLine
open-end funds and the DoubleLine Total Return Bond Fund "are a
product of two things - the general move by investors back into
fixed-income funds and good risk-adjusted returns provided by
our managers," said Loren Fleckenstein, an analyst at
Gundlach, who as co-founder and chief investment officer at
DoubleLine helps oversee $52 billion in assets, is widely
followed for his investment calls including a bet earlier this
year that Treasuries were undervalued relative to other sectors.
The yield on the 10-year Treasury note was 2.51
percent on Friday, down from around 3 percent at the start of
the year. Bond yields move inversely to their prices.
In June, in an investor webcast, Gundlach said the 10-year
U.S. Treasury note will likely yield 2.20 percent to 2.80
percent during the second half of the year.
Gundlach said U.S. Treasuries are "something of a
high-yielding" security relative to European sovereign bonds.
Gundlach also said U.S. Treasuries are worth a look by
investors as they are yielding in the upper half of his
projected trading range.
"They've outperformed due to strong performance of non
government-backed mortgages and exposure to longer duration
government-backed mortgages," said David Schawel, vice president
and portfolio manager of Square 1 Financial. "DoubleLine hasn't
seen any hiccups since opening up shop and I think investors
realize they've been shrewd at deciding when and where to take
One of DoubleLine's main rivals, the Pimco Total Return
Fund, has been facing underperformance and net outflows.
The Pimco Total Return Fund was down 0.52 percent in July,
lagging 90 percent of its peers, and behind 77 percent of its
peers so far this year with returns of 3.16 percent.
But the Pimco Total Return Fund, run by Bill Gross, is still
the world's biggest bond fund with assets under management of
$225 billion while DoubleLine's Total Return Bond Fund has
assets under management of $33.9 billion.
(Reporting by Jennifer Ablan; Editing by James Dalgleish and