Jeffrey Gundlach looks set to follow another bond fund star, Bill Gross, into the business of actively managed exchange-traded funds.
DoubleLine Capital LP of Los Angeles was started in 2009 after Gundlach's noisy split from TCW Group Inc. and has been talking to a few possible partners about launching a series of actively managed ETFs in the first quarter of next year, said Ron Redell, the president of DoubleLine Funds.
The discussions are tentative, Redell said.
"We don't know what strategies we'll run yet," he said. "I do anticipate Jeffrey Gundlach running some of those active ETFs." Luz Padilla, who heads DoubleLine's emerging markets fixed-income team, will manage another, he said.
Gross became the first star fund manager to lend his skills to an actively managed ETF in April, when Pacific Investment Management Co. said it would launch a new version of its popular Pimco Total Return Fund. That was hailed as a game changer, demonstrating that most active strategies could be turned into ETFs.
DoubleLine has grown quickly since Gundlach's very public firing from TCW, and now manages about $12 billion in mutual funds, separately managed accounts and other vehicles. Its flagship $7.6 billion DoubleLine Total Return Bond Fund is the top-performing intermediate-term bond fund in the year through May 31, according to Morningstar Inc. It has gained 15.7% in the period while its peers are up 7.4% on average, Morningstar said.
Scott Burns, director of ETF analysis at Morningstar, said Gundlach has a brand name that would transport well to an active ETF.
"I would consider him one of the top bond investors," Burns said. "The evidence is apparent in just how much money followed him to DoubleLine."
