(Adds quotes from Minerd on Federal Reserve’s unwind of balance sheet)
By Jennifer Ablan
NEW YORK, May 1 (Reuters) - Guggenheim Investments, overseen by Global Chief Investment Officer Scott Minerd, had positive net flows of more than $944 million into its fixed-income mutual funds and exchange-traded funds in April, the firm said on Monday.
Guggenheim’s flagship Total Return Bond Fund, an intermediate-term fund that has outperformed 99 percent of its rivals over one, three, and five years, according to Morningstar, took in $250 million in April, the firm said.
The $6.1 billion fund has experienced net inflows for 40 consecutive months, Guggenheim added.
“I tend to look for big trades and big trades take a long time to play out,” Minerd said in a telephone interview. “The big trade we’ve been doing...betting on a flattening of the yield curve, has worked pretty well for us.”
“We’ve been in very high-quality, long duration assets like 30-year Treasury STRIPS,” he said, using an acronym for Separate Trading of Registered Interest and Principal of Securities.
Meanwhile, the Guggenheim Macro Opportunities Fund, a $5.3 billion non-traditional bond fund that has also outperformed 99 percent of its rivals over five years, took in $250 million in April, the firm said.
Guggenheim Limited Duration Fund, a short-term bond fund with $1.5 billion in assets under management, experienced its 41st consecutive month of net inflows since its December 2013 inception. It has outperformed 99 percent of funds in its Morningstar category over three years.
Guggenheim said its BulletShares suite of defined maturity ETFs had $138 million in net flows in April, which helped the firm reach an all-time high with $35 billion in ETF assets under management.
On the Federal Reserve, Minerd said he has been contacted by the central bank regarding the unwinding of the balance sheet issue.
“They’re concerned primarily, at this point, with what the market expects. This is my opinion, they don’t want to surprise the market like they did when the ‘Taper Tantrum’ occurred. So they really want to avoid, in my opinion, having the market suddenly react badly.”
Fed staffers are seeking bond fund manager feedback on how the central bank should tailor and communicate its exit from record holdings of Treasuries and mortgage-backed securities. Fed officials are intent on shrinking their crisis-era $4.48 trillion balance sheet in a way that is not disruptive and does not supplant the federal funds rate as the main policy tool.
Minerd said he believes the Fed will announce its intention to wind down the balance sheet. (Reporting by Jennifer Ablan; Editing by Bernadette Baum and Lisa Shumaker)