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(Adds DoubleLine analyst comment, additional flows, fund performance data)
By Sam Forgione
NEW YORK, Jan 3 (Reuters) - The DoubleLine Total Return Bond Fund posted a net outflow of $3.5 billion in December, its biggest one-month withdrawal ever, data from research firm Morningstar showed on Tuesday.
The fund, which launched in April 2010 and is DoubleLine's flagship, attracted a net $3.05 billion in new cash for all of 2016, the Morningstar data showed. The fund's December outflow, which reduced its assets to $55.7 billion, marks its second-straight net cash withdrawal after it bled $1.4 billion in November.
Overall, the DoubleLine open-end mutual funds collectively posted a net outflow of $3 billion in December and a total net inflow of $7.9 billion in 2016, the Morningstar data showed.
The DoubleLine Total Return Bond Fund invests primarily in mortgage-backed securities and is run by DoubleLine Chief Executive Jeffrey Gundlach and the firm's president, Philip Barach. Gundlach is known on Wall Street as the 'Bond King.'
The latest monthly outflow exceeded the DoubleLine Total Return Bond Fund's largest and second-largest net withdrawals for a month, of $2.12 billion and $2.07 billion, that were posted respectively during the "taper-tantrum" months of September and December 2013 according to Morningstar data.
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.
"We have seen, as have other intermediate-term bond managers, net outflows in the DoubleLine Total Return Bond Fund in the final months of the year as investors have responded to rising rates and also, maybe, doing some tax-related selling," said DoubleLine analyst Loren Fleckenstein.
"It wouldn't surprise me if we saw further net outflows from intermediate-term bond funds, including ours, in the months ahead."
The fund delivered a roughly 2.2 percent return in 2016 to lag 78 percent of peers, according to Morningstar data. The fund's five-year annualized return, of 4 percent, has beaten 94 percent of peers, Morningstar data show.
While investors pulled cash from the firm's flagship fund, the DoubleLine Shiller Enhanced CAPE fund and DoubleLine Flexible Income Fund were two of the firm's funds that attracted new money in December - $266 million and $113 million, respectively.
The inflows brought the DoubleLine Shiller Enhanced CAPE fund and the DoubleLine Flexible Income Fund's assets to $2 billion and $475 million, respectively.
Los Angeles-based DoubleLine managed over $100 billion in assets as of June 1, 2016, according to the firm's website. (Reporting by Sam Forgione; Editing by Bernard Orr)