Jeffrey Gundlach, manager of the top-ranked DoubleLine Total Return Bond Fund, said investors shouldn’t exit bonds after global fixed-income markets had their worst month in nine years.
“It’s a horrible time to be exiting bonds,” Gundlach, chief executive of DoubleLine Capital, said this past week during a webcast presentation.
Global bond markets posted their biggest monthly losses in nine years in May as the U.S. dollar rallied and stocks reached record highs.
The more than $40 trillion of bonds in the Bank of America Merrill Lynch Global Broad Market Index fell 1.5 percent on average. Treasurys fell 2 percent amid speculation a strengthening U.S. economy will allow the Federal Reserve to reduce its monetary stimulus.
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Gundlach said his favorite picks currently are bank loans, dollar-denominated emerging-market corporate bonds and non-agency mortgage-backed securities.
DoubleLine Total Return Bond Fund advanced at an annual average of 10.2 percent over the past three years, ahead of 99 percent of peers, and 1.5 percent this year, beating 88 percent of similarly managed funds, according to data compiled by Bloomberg.