Gundlach's main fund set to exceed US$50b in record time

[LOS ANGELES] Jeffrey Gundlach is poised to surpass US$50 billion in assets at his main mutual fund as early as this week, the fastest an active stock or bond manager has reached the milestone.

The growth of the DoubleLine Total Return Bond Fund, which stood at US$49.9 billion as of Oct 13, has been fueled by a combination of investor deposits and successful bets on the mortgage market and other assets since its April 2010 inception. It's up 3 per cent in 2015, beating 96 per cent of its peers, according to data compiled by Bloomberg, and it's outperformed 99 per cent of the competition over the past five years.

"The goal is not to manage the largest fund, but rather one of the most comfortable and rewarding funds for investors," Mr Gundlach, who runs Total Return with co-manager Philip Barach, said in an e-mailed statement.

Mr Gundlach, 55, who co-founded Los Angeles based DoubleLine Capital in 2009 after a contentious split from TCW Group, invests more than half of its net assets in mortgage-backed securities or related collateral guaranteed by the US government, such as bonds issued by Fannie Mae or Freddie Mac, according to the company's website. DoubleLine and TCW are among the firms that have benefited from last year's turmoil at Pacific Management Investment Co, where management disputes and the surprise exit of bond guru Bill Gross spurred some clients to look elsewhere.

DoubleLine Total Return's organic growth rate, which combines net subscriptions and investment returns, has averaged more than 10 per cent since inception, the fastest of 30 stock and bond funds with about US$50 billion or more in assets, according to research firm Morningstar Inc.

Total Bond Market II Index Fund, a passively run fund that mimics a basket of fixed-income assets, reached the US$50 billion mark 36 months after its 2009 inception. That fund has since grown to US$87.1 billion as investors flock to index products.

BLOOMBERG