Jeffrey Gundlach's DoubleLine Capital reached $100 billion in assets under management last month, the Los Angeles-based firm said this week.
DoubleLine, founded in December 2009 and considered one of the fastest-growing asset managers in the United States, benefited from inflows last month. The DoubleLine open-end mutual funds collectively posted a net inflow of $1.48 billion in May, bringing its year-to-date net inflow to $9.05 billion.
The DoubleLine Total Return Bond Fund, the largest fund by total assets of DoubleLine, had a net inflow of about $919 million in May, for a year-to-date net inflow of $7.20 billion. The DoubleLine Total Return Bond Fund is an open-end intermediate-term bond fund that invests primarily in mortgage-backed securities.
The DoubleLine Core Fixed Income Fund, an open-end intermediate-term bond fund that invests in different sectors of the fixed-income market, including corporate securities and collateralized loan obligations, had a net inflow of about $375 million in May, bringing its year-to-date net inflow to $1.29 billion.
Gundlach's prescient investment calls have helped catapult DoubleLine's rise. In a telephone interview with Reuters on Wednesday, Gundlach said the financial markets are extremely vulnerable to a "pretty good cocktail" of three factors: The Federal Reserve raising interest rates, the labor market weakening and Republican presidential candidate Donald Trump.
"You're going to have the Fed raising rates, the labor market is already softening and you'll see 'scare' articles about Trump that read, 'If you vote for this guy, we will go into depression'," Gundlach said.
As for equities, Gundlach said the S&P 500 Index has been struggling to reach and stay above 2,100, mirroring the slowish growth in the United States. "It's like people think that the Fed has this super-secret information about how strong the economy is about to become or that the economy is about to become smoking hot." Gundlach added: "The S&P 500 has exhibited declining highs for over a year, with two big drawdowns. This is 'dead money' with massive anxiety."
Gundlach reiterated he doesn't think Fed policymakers will move interest rates when they meet this month. He said world interest rate probability, or WIRP, has to triple from the current 22 percent to convince him that the Fed will move.
"Yellen is clearly less dovish than she was in March. But I watch the Fed and it is as if they have to ask the market about raising rates: 'Please, please, Can we raise rates?'"