(Adds Pimco declined to comment)
By Jennifer Ablan
NEW YORK, Nov 5 (Reuters) - DoubleLine Capital, the investment firm with $80 billion in assets overseen by widely followed co-founder Jeffrey Gundlach, posted net inflows of $1.61 billion in October, the 21st month it has attracted new money.
The Los Angeles-based firm said on Thursday that DoubleLine Total Return Bond Fund, which is its largest fund by total assets at $50.5 billion and which invests primarily in mortgage-backed securities, had a net inflow of $1.24 billion in October.
The $4.9 billion DoubleLine Core Fixed Income Fund also attracted new money last month.
DoubleLine Core, which actively allocates among different sectors of the fixed income market such as corporate bonds and loans, emerging markets debt, Treasuries and MBS, received $332.1 million, its strongest net inflow so far this year.
“An advisory firm which pulled client assets from the Pimco Total Return Fund after Bill Gross left and parked the money in a bond index fund allocated part of the proceeds last month to the DoubleLine Core Fixed Income Fund,” said DoubleLine analyst Loren Fleckenstein. “So I guess you could call it a delayed ‘Newport Beach effect.’” Pimco is headquartered in Newport Beach, California.
DoubleLine, BlackRock Inc, TCW and Vanguard are among the firms that have benefited greatly from last year’s management turmoil at Pimco. Even so, the Pimco Income Fund, overseen by Group CIO Dan Ivascyn, reached more than $51 billion in assets under management in October.
Pimco Income and DoubleLine Total Return Bond are “fixed-income favorites,” Morningstar wrote in a report.
DoubleLine Total Return is posting returns of 2.49 percent so far this year, beating 98 percent of its category. The DoubleLine Core Fixed Income is posting returns of 1.57 percent, surpassing 93 percent of its category. Both funds are overseen by Gundlach.
Tiedemann Wealth Management has had allocations with Gundlach’s Core team since the fixed income managers were at TCW, Managing Director Kent Insley said. It followed them after they started DoubleLine as their own firm in December 2009.
“They have a thoughtful approach to risk-management,” he said. “Jeffrey is an excellent manager and team leader, but there’s also Phil Barach and Bonnie Baha, who quite frankly are excellent, too.”
Morningstar’s intermediate-term bond fund category had net outflows in the third quarter. In contrast, DoubleLine Core had net flows of $180.1 million, and DoubleLine Total Return, $2.26 billion. Pimco declined to comment on this story. (Reporting by Jennifer Ablan in New York; Editing by Frances Kerry and Lisa Von Ahn)