NEW YORK (Reuters) - Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, said on Wednesday that his firm had sold some Apple Inc. shares and that the U.S. Federal Reserve may not end its bond buying this year.
Gundlach also told CNBC television that Puerto Rico’s bonds were “fine.”
Gundlach told CNBC that he did not see Apple’s stock price heading much higher. He bought Apple shares at around $405 a share and told Reuters last November that the company’s shares were a “good diversifier.”
“The most recent move we did was to sell some Apple, simply because I just don’t see it going much higher than $550,” Gundlach said.
Gundlach said he still owned “a little bit” of Apple stock. Apple shares traded up 0.1 percent at $536.66 in afternoon trading Wednesday.
Gundlach, who manages the roughly $31 billion DoubleLine Total Return Bond Fund, has made a series of prescient calls on global equity markets. In 2012, Gundlach correctly predicted that Apple shares would fall to $425.
His flagship mutual fund is up 2.21 percent this year, beating 99 percent of peers, according to Morningstar data.
Gundlach also told CNBC that market volatility may prevent the Fed from ending its bond buying program this year.
In her first public comments as Fed chief on Tuesday, Chair Janet Yellen emphasized continuity in the central bank’s policy strategy of cutting asset purchases by $10 billion a month.
“My suspicion, though, is they will not end QE (quantitative easing) in 2014,” Gundlach said.
Gundlach said that the yield on the benchmark 10-year U.S. Treasury note could fall to 2.5 percent or lower, and that sentiment toward the securities could shift from negative to positive. The 10-year note was down 12/32 in price to yield 2.761 percent late on Wednesday.
Gundlach had comforting words for investors in Puerto Rican debt.
On Tuesday, Fitch Ratings cut Puerto Rico’s credit rating to junk, making it the third major ratings agency in a week to downgrade the U.S. commonwealth.
“If you really want to make some money but aren’t afraid of losing a little sleep at night, I think that Puerto Rico bonds are fine,” Gundlach said.
The Los-Angeles-based DoubleLine Capital had over $47 billion in assets as of December 31, 2013, according to the firm’s website.
Reporting by Sam Forgione; Editing by Chizu Nomiyama