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Jeffrey Gundlach’s DoubleLine Funds, reported an eighth consecutive month of inflows in September, with net inflows of $1.65 billion, more than double the amount of the previous month.
DoubleLine Capital, which was founded by Gundlach in 2009 after being fired from TCW, said on Wednesday its flagship DoubleLine Total Return Bond Fund ended September with net inflows of $1.32 billion, compared with $562 million in August, bringing the fund’s net inflow to $3.79 billion so far this year.
DoubleLine’s overall inflow of net $1.65 billion in September compares with net inflows of $697 million in August, DoubleLine said in a press release, and brings DoubleLine’s net inflow total to $5.07 billion.
The DoubleLine Total Return Bond Fund is posting returns of 5.3 percent year-to-date, surpassing 90 percent of those in its peer category, according to preliminary Morningstar data.
The vast majority of September inflows came on the day Bill Gross sensationally quit DoubleLine rival PIMCO to join Janus Capital Group Inc, the day before he was expected to be fired from the huge investment firm he co-founded more than 40 years ago.
DoubleLine Capital saw between $400 million and $500 million of net inflows last Friday in the wake of Gross’ departure, Gundlach said earlier this week.
Ron Redell, president of DoubleLine Funds, told Reuters: “There has been a significant amount of fixed income assets in motion based on recent news. We believe DoubleLine, as well as other asset managers, are receiving an increase in interest.”
Todays Other Top Stories
Learn Bonds: – 3M – Firing on all cylinders. – Not every Wall Street analyst has a buy recommendation on 3M (NYSE: MMM) – in fact, only about a third do. So, I keep looking for a reason not to buy it and I can’t find one. This $31 billion global industrial conglomerate headquartered in the heartland (near St. Paul, Minnesota) has long been a winner for investors, and to me looks like it’s just going to keep on being one.
Reuters: – Bank of America top U.S. muni underwriter in Jan-Sept. – Bank of America Merrill Lynch remained the top senior underwriter of U.S. municipal debt in the first nine months of 2014, with 262 deals totaling $28.77 billion, Thomson Reuters data released on Wednesday showed.
Bloomberg: – Puerto Rico sets note sale at 7.75% interest rate, filing shows. – Puerto Rico’s Government Development Bank plans to sell debt maturing in June 2015 with an interest rate of 7.75 percent, according to a posting on the Electronic Municipal Market Access website.
Bond Case Briefs: – Junk bonds prove September treasure as defaults ebb: Muni credit. – The riskiest municipal bonds are beating the market for the longest stretch in 20 months as investors bet a strengthening economy will keep defaults at the lowest in five years.
Times Colonist: – Wall Street sees ‘danger signs’ of a sell-off as bonds soar, flaws in trading system emerge. – Main Street investors have poured a trillion dollars into bonds since the financial crisis, and helped send prices soaring. As fund managers and regulators fret about an inevitable sell-off, the bigger fear is that when people go to unload, there won’t be anyone to buy.
BondBuyer: – Tobacco sell-off will end soon; Buy high beta tobacco. – Tobacco bonds may soon recover from a sell-off that was exacerbated by Bill Gross’ departure from PIMCO, according to the Citigroup strategist who identified the trend in a report Monday.
WSJ: – Small bank aims big guns at Puerto Rico. – (Subscription) As Puerto Rico Governor Alejandro Garcia Padilla grappled with economic crisis this summer, he received a stream of letters from the U.S. House of Representatives. But the Congressmen who wrote to Mr. Padilla didn’t address Puerto Rico’s shaky finances. Instead they attacked his treatment of a small local bank, Doral Financial Corp.
ValueWalk: – Bankruptcy Judge rejects CaLPERs seniority in muni bond bankruptcies. – Judge Klein says that California state law doesn’t give CalPERS any special rights under Federal bankruptcy law, overturning what most investors had taken for granted.
Market Realist: – Primary markets update—US Treasuries and high-grade bonds. – In this series, we’ll discuss bond sales made by the U.S. Treasury. We’ll also analyze investment-grade corporate borrowers in the week ending September 26. We’ll discuss major secondary market trends affecting U.S. Treasury yields and corporate bond yields and spreads.
Bloomberg: – SEC’s Gallagher sees bond bubble hurting retail investors. – The $10 trillion U.S. corporate bond market has been inflated by companies taking advantage of record low interest rates for the last five years, Securities and Exchange Commission member Daniel M. Gallagher said today.
Columbus Dispatch: – Experts worry inevitable sell-off will shatter fragile bond market. – A bottleneck is building in the global market for bonds.
WSJ: – The case for muni bonds and emerging markets. – (Subscription) Steven Hefter, a Barron’s top financial advisor, sees contrarian opportunities in municipal bonds and emerging market stocks.
WSJ: – U.S. Government bonds rally. – (Subscription) U.S. government bonds started the fourth quarter on a high note on Wednesday as manufacturing data added to worries over weak economic growth in the eurozone.
Bloomberg: – Treasuries advance most in 8 months on yield appeal. – Treasuries gained the most in more than month as yields higher relative to most Group of Seven nations increased demand from investors worldwide concerned global growth is stalling.
Investment Grade Bonds
Bloomberg: – Bayer sells $7 billion of bonds for Merck unit purchase. – A unit of Bayer AG sold $7 billion of notes in the company’s largest dollar-denominated bond issue to help fund the purchase of Merck & Co.’s (MRK) consumer-care business.
Donald van Deventer: – Citigroup Inc.: Default risk drops sharply and bonds remain solid value. – We conclude that Citigroup Inc. bonds rank in the top one-third of all heavily traded bonds on September 30 when ranked by ratio of credit spread to default probability.
High Yield Bonds
Bloomberg: – Tepper sees junk debt at fair value, equity prices not high. – Billionaire hedge-fund manager David Tepper said price-to-earnings ratios for U.S. stocks aren’t high and that junk bonds are at the midpoint of fair value.
Market Oracle: – Using put options to bet on a junk-bond crash. – Rick Ackerman writes: Here’s an easy play for those who have never cashed a winning ticket trading put or call options. Specifically, I am going to tell you how to bet on a junk-bond crash without risking your shirt — even if junk bonds continue to defy gravity indefinitely.
IFR: – Slow October start for US high-yield market. – US high-yield issuers stayed clear of the primary bond market on Wednesday, with only a small add-on due to price as October got off to a slow start amid relatively choppy conditions.
Barron’s: – Emerging markets now in panic mode? – The MSCI Emerging Market ETF is now in negative territory for the year, down 0.56%, and only up slightly if you include dividends.
FT Adviser: – Oracle: Remember the rules of the road. – Fans of emerging markets have had a tough few years, but the unexpectedly decent performance of emerging market stocks and bonds this year has many proclaiming that now is the time to take the plunge. Now could be the time to start investing in emerging markets. But bear in mind some rules of the road.
Canadian Underwriter: – Quiet third quarter for cat bond issuance, but 2014 could be ‘record-setting’. – No property and casualty catastrophe bond issuance activity occurred in the third quarter this year, but 2014 could still potentially be “record-setting,” according to a new report from Property Claim Services.
Business Insurance: – Cat bonds becoming cheaper form of reinsurance: Willis executive. – Willis Capital Markets & Advisory Ltd.’s chief executive Tony Ursano has said that catastrophe bonds are becoming an increasingly cheaper form of reinsurance, adding that the “dynamics” in the insurance-linked securities market is changing, The Royal Gazette reported.
Professional Advisor: – Sector report: The challenges ahead for strategic bond managers. – After a strong start to the year, bond market bleakness appears to have caught up with funds in this sector. Oliver Kettlewell explores what to look out for as the year goes on.
DealBook: – Bill Gross may be gone, but his strategy lives on at Pimco. – While executives at the shaken bond giant are moving quickly to distance themselves from the flashy, at times divisive, style popularized by its co-founder and public face, William H. Gross, they have embraced his recently minted view that a stagnating global economy will force central banks to keep interest rates low.
ETF.com: – Why laddering bond ETFs works right now. – f interest rates do rise in the next year or two, laddering a bond portfolio could prove to be an effective way of managing duration risk while collecting a somewhat-predictable income. That’s in essence what Wayne Schmidt, chief investment officer of Arden Hills, Minnesota-based Gradient Investments suggests.
David Merkel: – Possible bond ETF problems. – There have been a few parties worrying about crises stemming from ETFs, because they make it too easy for people to sell a lot of assets in a crisis. I think that fear is overblown, but I don’t think it is non-existent, and I would like to use a bond ETF as an example of what could be possible.
ETF Guide: – So this is the bursting of the bond market’s bubble? – Never mind which company Bill Gross is working at this week. The talking heads on Wall Street have been ranting about the bursting of the bond market’s bubble for years and it’s getting old. They did it in 2009. They did it in 2010. They did it in 2011. They did it in 2012. They did it in 2013. And they’re doing it again in 2014.
CALPERS DENIED SPECIAL PROTECTION IN CITY BANKRUPTCIES CALPERS NOT IMMUNE TO POWER OF BANKRUPTCY CODE, JUDGE SAYS
— Brian Chappatta (@BChappatta) October 1, 2014
*PIMCO’S TOTAL RETURN FUND HAD $23.5B IN OUTFLOWS IN SEPTEMBER
— Mary Childs (@mdc) October 1, 2014
If it walks like a duck, if it quacks like a duck, then it’s #QE ! Market will agree soon
— Peter Tchir (@TFMkts) October 2, 2014