“We can’t do $100 billion in the Total Return Bond Fund,” he said. “The market isn’t big enough for our style, the things we invest in.”

That fund has invested largely in mortgage-backed securities and returned 3.5 percent annually for the past five years, outperforming 92 percent of its peers as measured by Bloomberg. In 2016 it trailed the benchmark Bloomberg Barclays US Aggregate bond index for the first time, a lag Gundlach said was mostly because the fund doesn’t invest in corporate debt.

He also said a decline in the Total Return Bond Fund’s assets from $62 billion last September, traditionally seen as a warning sign, reflects a decision to concentrate less on a single product. While other firms discounted fees to lure more investors, DoubleLine sought instead to attract assets to its other funds, including the Core Fixed Income and Shiller Enhanced CAPE, both co-managed by the firm’s deputy chief investment officer, Jeffrey Sherman.

“I don’t want one $150 billion fund, I want 10 $15 billion funds. A diversified business,” Gundlach said in the interview. “We lose business because our fees are too high and I say, ‘Fine, that’s a way of regulating growth.’”

DoubleLine has adapted the “smart beta” programmatic approach to investing in stocks, first used in the Shiller CAPE fund, to a similar product for European markets, and Gundlach said the next step may be a global stock fund.

DoubleLine’s funds have consistently outperformed their peers. That’s what appeals to investors even if its fees aren’t the industry’s lowest, according to Todd Rosenbluth, fund research director at CFRA, a New York-based investment research firm. An example is the SPDR DoubleLine Total Return Tactical ETF, which has continued to attract assets and has a $3.4 billion market cap.

DoubleLine Driven

“People were driven to buy a Gundlach-driven portfolio -- DoubleLine-driven, not just him,” Rosenbluth said. “As long as the firm follows the same approach and delivers the same return, I think investors are going to be very pleased.”

Gundlach started DoubleLine after a dispute with management at TCW Group led to his ouster and prompted a legal battle. Oaktree took a 20 percent stake. When DoubleLine’s Total Return Bond Fund hit $50 billion in 2015, many speculated Gundlach had ambitions to build a giant firm.

Instead, his goal is to keep DoubleLine small enough that it can continue buying a range of assets at good prices and outperform its benchmark indexes and peer funds. Anything larger would require a corporate infrastructure at a "totally different level" and many more employees than the more than 200 DoubleLine has now, Gundlach said.