Prepare for a debt-fueled Donald Trump presidency, DoubleLine's Gundlach says

Prepare for a debt-fueled Donald Trump presidency, DoubleLine's Gundlach says
"Trump is extremely comfortable with debt," Mr. Gundlach told attendees at the annual Sohn conference.
MAY 02, 2016
By  Bloomberg
Jeffrey Gundlach, chief investment officer of DoubleLine Capital, told attendees at the Sohn Investment Conference to prepare for a Donald Trump presidency. “What's going to happen is you're going to get a Reagan response with Donald Trump," Mr. Gundlach told the New York crowd. “He promises a wall, he promises to bring jobs back, and he promises a lot of infrastructure spending. Let's face it: Trump is extremely comfortable with debt." Mr. Trump became the presumptive Republican nominee on Tuesday when Senator Ted Cruz dropped out of the race. The money manager predicted that if Mr. Trump wins the White House, the ratio of public debt to gross domestic product will rise. Mr. Gundlach's $59 billion DoubleLine Total Return Bond Fund has returned about 2 percent in 2016, compared with a 3.5 percent gain by the Barclays U.S. Aggregate Bond Index, the main benchmark for the broader bond market. The fund beat 98 percent of peers over the past five years, according to data compiled by Bloomberg. Mr. Gundlach also recommended shorting utilities stocks and buying mortgage real-estate investment trusts, both through exchange-traded funds. With one turn of leverage, the trade should rise by 35 percent, he said. Last month Mr. Gundlach told investors that it would be a good time to buy mortgage-backed securities and sell corporate bonds because the latter could be affected by elevated risk of defaults in high-yield debt. Junk has rallied with Treasury bonds because Federal Reserve Chair Janet Yellen seems to have scaled back expectations for multiple interest rate hikes this year.

Latest News

Bridgewater's flagship hedge fund surges amid volatile markets
Bridgewater's flagship hedge fund surges amid volatile markets

The firm's flagship fund, which invests in stocks, bonds, currencies, and commodities, saw accelerated gains as some peers lost ground.

ICI floats '40 Act revamp to support middle-class wealth creation
ICI floats '40 Act revamp to support middle-class wealth creation

Policy proposal offers recommendations on dual-share class funds, semi-transparent ETFs, and expanded flexibility for closed-end funds to include private market assets.

Trump-induced turbulence tests 60-40 strategy's limits
Trump-induced turbulence tests 60-40 strategy's limits

With bonds failing to provide a safety net for steeply falling stock prices, many investors are letting go of their "set it and forget it" approach.

More workers dipped into their retirement savings last year, Vanguard finds
More workers dipped into their retirement savings last year, Vanguard finds

Sneak peek into annual defined contribution plan report shows average participant balances reached an all-time high amid rising equity markets.

Decades-old will leaves fate of late actor Gene Hackman's $80M fortune uncertain
Decades-old will leaves fate of late actor Gene Hackman's $80M fortune uncertain

The iconic actor's death alongside his wife, Betsy Arakawa, leaves pressing questions about what happens next to his assets.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies