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PIMCO, DoubleLine Both Feature on Litman/Gregory Managed Portfolio Menu

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With high volatility and deleveraging expected to continue in the global markets, Litman/Gregory Asset Management is betting on two popular fixed-income funds—PIMCO’s Total Return and DoubleLine’s Total Return—for its clients’ managed portfolios.

Clearly, active management by star managers gets the thumbs-up in Orinda, Calf.-based Litman/Gregory’s playbook. Bill Gross is responsible for PIMCO’s Total Return Fund (PTTRX), which grew to a record $258.7 billion in April, while Jeffrey Gundlach’s $23.7 billion DoubleLine Total Return Bond Fund (DBLTX), attracted more money in February than any other U.S. mutual fund.

“Our fixed-income portfolios have less interest rate sensitivity, or lower durations, relative to the benchmark, and higher yields than traditional core bond portfolios,” said Alice Lowenstein, a certified financial planner and director of managed portfolios for Litman/Gregory Asset Management on Friday at the 2012 National Association of Personal Financial Advisors (NAPFA) annual conference in Chicago.

Lowenstein is responsible for institutional client relationships and business development for managed portfolio clients at Litman/Gregory, whose AdvisorIntelligence research unit helps advisors with model portfolios, tactical allocation changes and practice management advice. 

Litman/Gregory expects volatility to be higher this year due to “the messy deleveraging process,” Lowenstein said, as the markets have a lower yield cushion and thus a susceptibility to higher rates.

Both stock and bond returns are expected to be much lower going forward, and risk levels are higher, she said. In fixed income, Litman/Gregory is underweight investment-grade core and overweight absolute return.

Read more about the 2012 NAPFA national conference in Chicago at AdvisorOne.            


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