December 2, 2016 / 7:56 PM / 9 months ago

UPDATE 3-DoubleLine Total Return posts 3rd largest outflow since 2013 in Nov

(Adds ticker symbols of DoubleLine funds)

By Jennifer Ablan

NEW YORK, Dec 2 (Reuters) - The DoubleLine Total Return Bond Fund had net outflows of $1.4 billion in November, the third-largest cash withdrawals since the "taper-tantrum" months of 2013, while flows increased into DoubleLine's low duration and unconstrained bond funds, the firm said Friday.

The $59.2 billion DoubleLine Total Return Bond Fund , an open-end intermediate-term bond fund that invests primarily in mortgage-backed securities, is run by Jeffrey Gundlach, chief executive officer, and Philip Barach, its president. It is the largest fund in the firm by total assets.

The DoubleLine Total Return Bond Fund's largest and second-largest net outflows for a month, -$2.2 billion and -$2.0 billion, were posted respectively during the taper-tantrum months of December and September 2013.

In May 2013, after a mere suggestion of an imminent reduction or "taper" of bond purchases by then-Federal Reserve Chairman Ben Bernanke, yields skyrocketed in a span of four months.

Throughout 2016, Gundlach has warned that rising rates would translate into negative returns, which could spark a logical rotation out of intermediate-term bond funds. "I predicted this would happen," Gundlach said about the cash withdrawals.

But unlike during the taper tantrum of the second half of 2013, DoubleLine enters the next rising-rate period with multiple strategies and track records of three years or longer designed for investors fearing still higher rates.

Investors have moved money into DoubleLine's low duration, unconstrained bond and equity portfolios.

DoubleLine's largest equities portfolio, the $1.7 billion DoubleLine Shiller Enhanced CAPE fund, had a net inflow of $172 million in November, the largest net monthly inflow since the Oct. 31, 2013 inception of the fund. The fund had a year-to-date net inflow of $844 million.

The $360.2 million DoubleLine Flexible Income Fund , which is an unconstrained bond fund, had a net inflow of $36 million in November, its second largest net monthly inflow since inception and up from a $17.9 million net inflow in the previous month.

The DoubleLine Flexible Income Fund is run by Gundlach and Jeffrey Sherman, deputy chief investment officer.

The $3.4 billion DoubleLine Low Duration Bond Fund had a net inflow of $154.4 million in November, its largest net monthly inflow for the year so far and up from $61.5 million in October.

Gundlach said: "The diversification and innovation of investment strategies within our mutual fund company have offered investors solid choices in this current market environment. For example, the DoubleLine Shiller Enhanced CAPE Fund has been our fastest growing fund year-to-date, and provides a solid alternative to traditional passive equity investing."

Overall, the DoubleLine open-end mutual funds collectively posted a net outflow of $990.5 million in November. (Reporting by Jennifer Ablan; Editing by Tom Brown and Jonathan Oatis)

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