Savvy Managed Money Does Not See Fed Rate Hike In 2015
Jeffrey Gundlach, DoubleLine Capital’s CIO, said he does not see the US Fed raising interest rates this year even as the central bank is indicating that an increase is likely.
Mr. Gundlach said Wednesday at the CNBC Institutional Investor Delivering Alpha Conference in New York that if the Fed increases interest rates prematurely, it will have to cut again. The money manager also said that high-yield bonds will be a “debacle” in 3-4 years, although they are a good investment bet in Y 2015.
“I’m willing to dance the risk dance near the door” and invest in junk bonds this year, Mr. Gundlach said.
Mr. Gundlach, who runs the runs the top-ranked $46.6-B DoubleLine Total Return Bond Fund, said in May that the Fed may not be in the position to raise interest rates this year. Earlier this month, he put the chances of the Fed raising rates in September at below 25%.
The money manager reiterated that idea at the conference even as the Fed Chairwoman Janet Yellen said Wednesday that prospects are good for further improvement in the labor market and the economy, keeping the central bank on track for an interest-rate increase in Y 2015.
He said he is Bullish on emerging market bonds and Indian stocks, which he predicted are poised to rise over the next few decades on its growing labor force and favorable demographics.
“I’m really a 10 on a scale of 1-10 Bullish on Indian equities for the next generation,” he said.
Mr. Gundlach’s DoubleLine Total Return Bond Fund beat 79% of peers by returning 1.1% this year, according to the industry data. Over the past 5 years, the fund has beaten 99% of similarly managed funds. His Los Angeles-based firm oversaw $76-B at the end of June 2015.
Stay tuned…
HeffX-LTN
Paul Ebeling
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