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Thursday, May 5, 2016

This is What is Known in The Investment Business as Talking Your Book

In my earlier post about Bond guru Bill Gross I mentioned Jeff Gundlach the new "Bond King" who is attracting billions in assets with his own unconstrained bond fund. Like Gross he takes large concentrated positions with weightings far different than the total bond market index.

One well know technique of thse gurus is to get on as much as the media as possible promoting positions which you have taken in your portfolio. Nothing like a little extra buying from the guru followers to help the short term postion of your portfolio. Of course you can be sure this manager will have sold out his position before he starts appearing all over the media announcing his changed views of the market.

Via Bloomberg
Gundlach’s $59 billion DoubleLine Total Return Bond Fund has returned about 2 percent in 2016, compared with a 3.5 percent gain by the Barclays U.S. Aggregate Bond Index, the main benchmark for the broader bond market. The fund beat 98 percent of peers over the past five years, according to data compiled by Bloomberg.
Gundlach also recommended shorting utilities stocks and buying mortgage real-estate investment trusts, both through exchange-traded funds. With one turn of leverage, the trade should rise by 35 percent, he said.
Last month Gundlach told investors that it would be a good time to buy mortgage-backed securities and sell corporate bonds

And here is the  breakdown of Gundlachs Doubleline Total Return'Bond Fund's holdings showing it with an 83% weighting in mortgage back securities vs. a category average of just under 30%.

1 comment:

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