The $61.6 billion DoubleLine Total Return Bond Fund, the largest fund in the firm by total assets, had net outflows of $33.2 million in October, the first cash withdrawals since January 2014, the firm said on Tuesday.
The DoubleLine Total Return Bond Fund is an open-end intermediate-term bond fund that invests primarily in mortgage-backed securities (MBS). It is run by Jeffrey Gundlach, chief executive officer and chief investment officer of DoubleLine Capital, and Philip Barach, its president.
"I think bonds are headed toward outflow territory ... rising rates mean negative returns are developing," Gundlach said in a telephone interview. "Even DoubleLine is having 'day in' and 'day out' flows. It is not an inflow day every day."
Los Angeles-based DoubleLine, which oversees more than $106 billion, has benefited from a low-interest environment and the ferocious appetite for yield. Albeit marginal, the outflows from the Total Return Fund come as the Federal Reserve has set the stage for a hike in December.
Despite the small outflows from DoubleLine Total Return, net flows at the DoubleLine Fund family increased slightly in October from the prior month.
The $7.7 billion DoubleLine Core Fixed Income Fund had net inflows of $166.5 million in October, bringing its year-to-date net inflows to $2.1 billion. DoubleLine Core Fixed Income is an open-end intermediate-term bond fund that invests in different sectors of the fixed-income markets, including corporate securities, emerging markets debt and MBS.
DoubleLine's largest equities mutual fund, the $1.4 billion DoubleLine Shiller Enhanced CAPE fund, had net inflows of $77.3 million in October, bringing the year-to-date net inflows to $671.9 million and doubling its assets from year-end 2015.
The Shiller Enhanced CAPE has two sources of return: an actively managed fixed income portfolio and a rules-based exposure to the U.S. stock market.
This article was provided by Reuters.