October 1, 2015 / 3:32 PM / 4 years ago

Gundlach's DoubleLine Capital posts 20th month of inflows in Sept

Jeffrey Gundlach, chief executive of DoubleLine Capital, speaks during the Sohn Investment Conference in New York May 4, 2015. REUTERS/Brendan McDermid

NEW YORK (Reuters) - DoubleLine Capital, whose co-founder Jeffrey Gundlach is widely followed for his investment calls, on Thursday reported $1.1 billion in net additional investments in September, the 20th consecutive month it has attracted new money.

The Los Angeles-based firm said the DoubleLine Total Return Bond Fund, its largest portfolio by assets, had $790 million of inflows in September, for a year-to-date net inflow of $8.1 billion, DoubleLine said.

“The fund continues to outperform peers while taking on lower interest rate risk. They have lower duration than peers and balance credit risk in a barbell approach. So a strong yield with less risk,” said Todd Rosenbluth, director of ETF & Mutual Fund Research at S&P Capital IQ. “Investors seeking fixed income remain comfortable with the DoubleLine approach that has a long record of success.”

The $49.4 billion DoubleLine Total Return, which is returning 2.81 percent so far this year, ranks in the top 1 percentile in the Morningstar intermediate-term bond category.

The DoubleLine Core Fixed Income Fund had a net inflow of $123 million last month, following a net cash withdrawal of $58.2 million in August, bringing its year-to-date net inflow to $1.15 billion.

The DoubleLine Core Fixed Income Fund is an open-end intermediate-term bond fund that invests in different sectors of the fixed-income market, including corporate securities, bank debt, emerging markets debt and Treasuries as well as mortgage-backed securities.

Last year, Gundlach correctly predicted that U.S. Treasury yields would fall, not rise as many others had forecast, because inflationary pressures were non-existent and technical factors, including aging demographics, were at play.

This year, Gundlach said the U.S. economy and risk markets cannot digest a premature Federal Reserve hike. Raising rates too early would hurt high-yield “junk” bonds and help longer-duration government bonds such as U.S. Treasuries and government-guaranteed bonds such as mortgage-backed securities (MBS). Gundlach said he would rather own cash than short-maturity bonds because short-term fixed-income securities yield almost nothing. If investors are willing to accept no yield, it would be better to hold cash and forgo the risk for virtually zero yield with short-term bonds, he said.

DoubleLine was overseeing $81 billion in assets under management as of the end of third quarter, up from $76 billion as of June 30. The assets under management includes separate accounts, hedge funds, NYSE-closed end funds, the ETF, variable annuities, UCITS, subadvised open-end mutual funds and the DoubleLine Funds open-end mutual funds.

Reporting By Jennifer Ablan; Editing by Chris Reese and Chizu Nomniyama

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