Three U.S. bond kings wielding the same strategy have wound up with the same result: lagging benchmarks
NEW YORK - Three names dominate the U.S. world of bond investing - Jeffrey Gundlach, Dan Ivascyn and Scott Minerd. But funds run by these star investors are lagging their respective benchmarks this year.
Investors had been feasting on U.S. corporate credit bonds for years, though recession fears and mounting defaults late last year put an abrupt end to that. This year, the appetite for U.S. corporate bonds picked up dramatically when investors’ views on the economy began to improve and central banks became more accommodative.
All three investors – Gundlach, the chief executive of DoubleLine Capital; Ivascyn, group chief investment officer of Pacific Investment Management Co, known as Pimco; and Minerd, global chief investment officer of Guggenheim Partners – have been underweight corporate credit relative to their benchmarks.
The DoubleLine Total Return Fund , with $54.5 billion in assets under management, is up 6.17% this year, as of Aug. 23, according to Morningstar data. It is lagging its Intermediate Core-Plus Bond category by 2.50 percentage points, and lagging 90 percent of its peers this year, according to Morningstar. That Intermediate Core-Plus category invests primarily in investment-grade U.S. fixed-income issues including government, corporate and securitized debt, and has total assets of $724 billion.
The Pimco Income Fund , the largest actively managed bond fund, with assets of more than $130 billion, is lagging 93 percent of its Multisector Bond category so far this year, according to Morningstar data as of Aug. 23. The Multisector category typically invests in U.S. government obligations, U.S. corporate bonds, foreign bonds and high-yield U.S. debt securities and has assets of $259 billion.
Gundlach, Ivascyn and Minerd have also played defense with their interest-rate postures, keeping their respective portfolios at shorter durations.
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