DoubleLine Does it with Derivatives
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Friday, August 16, 2013

DoubleLine Does it with Derivatives

The Wall Street Journal's Liz Rappaport and Min Zeng report that DoubleLine [profile] has filed for a mutual fund, DoubleLine Shiller Enhanced Fund that will buy bonds and track the value of stocks with derivatives. The bond fund prince will run the fund himself, Jeffrey Gundlachalong with PM Jeffrey Sherman.

The futures contracts and derivatives the PMs will buy are tied to the Shiller Barclays CAPE Index, which tracks undervalued sectors of the stock market, Rappaport and Zeng write. Rappaport and Zeng report that the move may be a result of a loss of appetite among investors for traditional bond funds, resulting in losses for many firms, including Gundlach's. Though Gundlach has fared better than other fund firm founders such as Pimco's [profile] Bill Gross, how flagship fund, DoubleLine Total Return Bond Fund had a $580 million net outflow in July.

To read more, click here. To read Bloomberg's story on DoubleLine's new fund, click here.

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