Gundlach blasts TCW's touting as 'offensive to everyone in the industry'

Star bond fund manager Jeffrey Gundlach blasted his former employer TCW Group over a press release that touted the long-term performance of the fund he used to manage. The press release announced the $5.4 billion TCW Total Return Bond Fund Ticker:(TGMNX) won a Lipper mutual fund award based on its risk-adjusted performance in the U.S. mortgage bond category over five- and 10-year periods. Mr. Gundlach, now chief executive of DoubleLine Capital LP, managed the fund from its inception in 1993 to December 2009 when he was fired from The TCW Group Inc. “It's utterly inappropriate for them to be talking about the long-term track record of a fund they had nothing to do with,” Mr. Gundlach said. “It's offensive to everyone in the industry.” Mr. Gundlach was replaced by managers Mitchell Flack, Tad Rivelle and Bryan Whalen. “The team that took over the TCW Total Return Bond Fund in December 2009 has delivered very strong performance for nearly two and a half years, ranking in the top quartile of its Morningstar peer group,” countered Peter Viles, spokesman for TCW. The new management team performed well on the heels of Mr. Gundlach's high-profile ouster, posting a return of more than 10% in 2010, 2.6% better than its category average, while dealing with the liquidation of approximately half the fund's $10 billion in assets, thanks to outflows that followed Mr. Gundlach's firing. The fund slumped badly last year, though, notching a 3.88% return. That placed it in the bottom 10th percentile of the same category. This year it's back on the upswing and ranks in the top 5th percentile of intermediate-term-bond funds. Meanwhile, the DoubleLine Total Return Bond Fund Ticker:(DLTNX), which Mr. Gundlach launched following the founding of his new firm, has been a runaway success with investors. It's grown to more than $22 billion in just over two years and a $10,000 investment at inception would be worth $13,156 today, compared with $11,779 for an investment in the TCW Total Return Fund over the same time period.