Gundlach dips toe into uber-indexing

His firm, DoubleLine, to launch fund based on Shiller's P/E

Aug 15, 2013 @ 5:57 pm

By Jason Kephart

Jeffrey Gundlach
+ Zoom
Jeffrey Gundlach (Bloomberg)

DoubleLine Capital LP plans to launch an enhanced index fund based on Yale University economics professor Robert Shiller's cyclically adjusted price-earnings ratio.

The DoubleLine Shiller Enhanced CAPE Fund will use derivatives — either swaps or futures contracts — to track the Shiller Barclays U.S. Sector Total Return Index, which invests equally in the four most undervalued U.S. stock sectors based on their CAPE ratio and their price momentum over the past 12 months.

Because the fund is using derivatives, which don't require a large investment, to track the index, bond superstar Jeffrey Gundlach, DoubleLine's founder and chief executive, and co-manager Jeffrey Sherman will have the ability to invest in a range of fixed-income securities with the majority of the fund's assets to boost returns.

The fund also plans to use leverage, according to a filing with the Securities and Exchange Commission.

It is a similar strategy to the one used by Pacific Investment Management Co. LLC's IndexPlus series of funds, one that has proved successful.

The $2.7 billion Pimco Fundamental Enhanced IndexPlus Absolute Return Fund (PXTIX), for example, is in the top 1% of large-cap-blend funds over the past three- and five-year trailing periods, according to Morningstar Inc.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Pershing's Crowley: The case for business transformation

Your practice is changing rapidly. What worked five years ago might not work for the next five years. Pershing's Jim Crowley has some solutions as your business evolves.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print