Gundlach: Steer clear of these bonds

Gundlach: Steer clear of these bonds
Fund manager warns about risks of short-term, investment-grade debt; 'no yield'
JUL 11, 2012
Investors should avoid highly rated shorter-maturity debt because the potential returns are too low, according to DoubleLine Capital LP's Jeffrey Gundlach. “There is absolutely no reason to own any investment-grade bonds inside of three years for sure,” Gundlach, chief executive officer of Los Angeles-based DoubleLine, said in an interview on Bloomberg Television. “And maybe even five years is getting to that category because it has no yield.” The U.S. Federal Reserve has helped drive down bond yields by pledging to hold its target for short-term interest rates near zero until 2014 to support the economy. Yields on investment-grade corporate bonds with maturities in one to three years averaged 1.79 percent yesterday, near the record low of 1.46 percent reached in August 2011 and down from 5.35 percent at the end of 2006, according to Bank of America Merrill Lynch index data. The central bank is unlikely to change its stance to fight inflation because it wants price gains, “so it's not like you will be rolling over into higher yields any time soon,” Gundlach said. He said that he's focusing on mortgage debt, which offers better yields, “though not what we'd like to see.”

Latest News

Private credit becoming 'big piece' of annuities, T. Rowe exec says
Private credit becoming 'big piece' of annuities, T. Rowe exec says

Goldman Sachs retirement survey finds 83% want guaranteed income, while the annuities providing that income increasingly hold private credit.

Zocks debuts Claude plugin with seven skills for financial advisors
Zocks debuts Claude plugin with seven skills for financial advisors

The AI meeting assistant's Advisor Intelligence plugin turns client conversation data into annual reviews, tax scans and attrition alerts.

Stifel settles massive $30 million complaint involving star broker’s sale of structured products
Stifel settles massive $30 million complaint involving star broker’s sale of structured products

Chuck Roberts and Stifel have been facing scrutiny due to sales of structured products and structured notes.

SEC floats CFP route to accredited investor status, fund rules refresh amid private market push
SEC floats CFP route to accredited investor status, fund rules refresh amid private market push

Among other updates, the proposals would let advisors to regulated funds earn performance fees and allow interval funds to offer monthly repurchases.

The Year Is 2046 and I’m a Financial Advisor 
The Year Is 2046 and I’m a Financial Advisor 

What will financial advice look like 20 years from now? Evan Vladem explores how AI may transform wealth management while reinforcing the enduring value of human guidance, trust, and empathy. 

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains