DoubleLine, whose name alludes to the works of abstract artist Piet Mondrian, oversees $73 billion in a mix of mutual funds, closed-end funds, separate accounts and limited partnerships.
Cash Infusion
The firm was among the bond managers that benefited as investors pulled money from Pacific Investment Management Co. after Bill Gross suddenly left Pimco in September to work for Janus Capital Group Inc.
DoubleLine attracted $3 billion in January, the most it has won in any month. The firm has said it will close DoubleLine Total Return to new money well before it reaches $100 billion in assets.
Gundlach has distinguished himself at DoubleLine with mostly accurate predictions on interest rates. Sensing weakness in the U.S. economy in 2011, he reduced his holdings of riskier assets and boosted his position in long-dated government-backed mortgage securities that behave much like Treasuries.
When rates fell as Gundlach anticipated, the fund returned 9.5 percent in 2011, beating 98 percent of peers, Morningstar data show. Longtime rival Gross, who then ran the Pimco Total Return Fund, missed the bond rally and later called the year a “stinker” in a letter to clients.
Rate Predictions
In January 2014, Gundlach told Bloomberg News that markets were wrong to expect rising interest rates. He said rates would again fall, in part because pension funds would need to buy bonds to rebalance after stocks rallied in 2013.
As the yield on the 10-year Treasury note declined to about 2.2 percent from 3 percent over the course of the year, DoubleLine Total Return outperformed 90 percent of its peers.
Gundlach misfired with his forecast in 2013, when he predicted that interest rates would peak at 2.35 percent. Yields climbed to 3 percent as investors reacted to former Chairman Ben Bernanke’s suggestion that the central bank would scale back its bond purchases.