DoubleLine CEO and CIO Jeffrey Gundlach says the fund family’s Total Return Bond Fund (DLTNX) could close to new investors in 2015.
“It’s been at around $40 billion … for quite a while,” he said during a webinar on Tuesday. “A lot of people are ambulance chasing, but we are not interested in asset bloat. We like to grow in a controlled way. It has further capacity, but we could close it in 2015. And there’s a greater than 50% probability that we will. Not in the first quarter, but we are serious about capacity constraints.”
The DoubleLine Total Return Bond Fund was launched in April 2010. For the 12 months ending Oct. 31, its retail-investor shares improved 4.98% vs 2.73% for the Barclays U.S. Aggregate Index, which tracks bonds.
In contrast to PIMCO Total Return’s outflows, the DoubleLine Total Return Fund had net inflows of about $804 million in November, according to Morningstar. DoubleLine says its inflows were close to $820 million.
In general, Gundlach says, investors can buy and hold DoubleLine funds. “If the Fed raises rates, bonds should do better – not worse – as is happening already. If you are really worried about a long-term rise in interest rates – and we are not – you should move into our flexible, low duration bond fund,” he noted.
The fixed-income specialist says investors benefit from being in dollar-denominated holdings right now.
“The dollar is smoking hot, and the U.S. could raise rates, so it would strengthen vs. virtually all other currencies,” he said.
While the U.S. economy and currency remain strong, many other parts of the world are facing big challenges, and commodity prices continue to drop. “We could end up importing some deflationary aspects of the world economy and that could come at the price of U.S. growth,” Gundlach explained.