Gundlach sticks to his guns despite big drop in rival's Japan fund

DoubleLine's Jeffrey Gundlach says the Nikkei offers great long-term bets -- despite one fund's 5% hit on Monday
APR 23, 2013
By  JKEPHART
Jeffrey Gundlach is standing by his call to go long Japanese stocks and short the yen. But he concedes that, over the short-term, the strategy could be painful. Mr. Gundlach, CEO of DoubleLine Capital and bond expert deluxe, first made his call in December when the Bank of Japan made clear its intentions to weaken the yen to stimulate its economy. It's worked out well for investors since then. The $5 billion WisdomTree Japan Hedged Equity ETF (DXJ), which offers exposure to Japan without the yen, is up 20% since Mr. Gundlach's mid-December prediction. The iShares MSCI Japan ETF (EWJ), which doesn't hedge away the yen, is up 12% over the same time. The problem now is, whether the yen has fallen too far too fast. After dropping 20% to the dollar from November to January, its been slowly edging its way back up. On Monday, the currency rose 1% versus the dollar, leading to a 5.4% loss in the WisdomTree Japan Hedged Equity ETF. “I love it in the long-term,” Mr. Gundlach said on a Monday night conference call to introduce the firm's new equity fund. “It's so fully extended now we don't love it in the short-term.” That doesn't mean he thinks you should try to time it though. “It's too good of a long-term strategic play to try and get cute. You usually end up being out when it get backs to the winning side if you do that,” he said. Mr. Gundlach's never managed an equity fund himself, but he has shown he knows a trend when he sees it. He famously called the financial crash at the Morningstar Investment Conference in 2007. More recently he told investors to short Apple, which was on its way from $600 to $700 a share at the time. It's now trading at $430 a share, just above his $425 a share prediction.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave