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Gundlach on Rival PIMCO's Record and Position

Jason Stipp

Jason Stipp: Jeffrey, last question for you, more of a business question for DoubleLine as a firm and the landscape out there. One of the names that hasn't been mentioned a lot in the news reports over the last couple of weeks is PIMCO. Some people may think that PIMCO could come out of this looking like the more stable option for bond fund investors now.

Looking at the competitive landscape from your point of view now starting at the new venture of DoubleLine, do you agree with that? How would you answer that assertion that maybe PIMCO is coming out ahead from this change that's coming in your marketplace?

Jeffrey Gundlach: I don't have anything particular to say about PIMCO. I'm not an insider there. But certainly PIMCO is a good firm. And Bill Gross has done a very good job over the past 10 years and through the credit crisis.

Frankly, I think I'm in a unique position to understand the good job that Bill did because I've done a better job. And not many people have. It's very hard to deliver results like that, and they should be commended for it. Again, I'm in sort of a unique position to know how hard it is, having done that and a little bit more myself.

But regarding PIMCO winning or losing on this, I wish them well. I don't know what'll happen relative to their AUM and the like. I think temporarily they probably have been a parking place for some assets. But frankly $3 billion or $4 billion from TGLMX to PIMCO--even if it all went there, and I doubt that it did--is not really going to move the needle on PIMCO's funds.

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In the future, PIMCO, the landscape of PIMCO and Jeffrey Gundlach and DoubleLine hasn't changed. We've been friendly competitors for a long time, and I think there's mutual respect between the firms.

I think that now, clearly DoubleLine is an improvement over the previous Jeffery Gundlach deliverable, because DoubleLine is majority owned by its principles. So it's the most stable possible place, with complete alignment of interests and an energized team that is very interested in growing and filling up a void which we perceive in the industry, which is a great demand for quality, risk-adjusted, fixed income services, and not that much supply.

Because a great number of firms have had a hard time getting in synch with the current economic environment and the default culture, which continues to roll forward. And very few firms seem to be able to operate successfully relative to an index fund approach in this environment.

And certainly DoubleLine has proven that with the team's record in the past. And PIMCO has done that too, although a little bit more--actually quite a bit more risk, some draw-downs in volatility. But similar returns, at least for many time periods.

So I think DoubleLine is very stable. As stable as it could possibly get. And I do know--although I don't know much about the inner workings of PIMCO--that they are owned by a European bank, I think.

And I know what it's like to be owned by a European bank, because that's where I was. And sometimes the European bank takes your deliverable and just takes it away from you. I know that firsthand.

So when it comes to relative stability, I think it's DoubleLine beats PIMCO hands down. But again, I don't have anything negative to say about Bill Gross and PIMCO. We're friendly competitors, and I wish them well.

But DoubleLine has a unique deliverable, and we are hopeful, and every indication supports the idea that we will be a beneficiary of a great deal of investor interest, and we are honored to be chosen as a fiduciary for investors.

They know that we care deeply about their success, and that our success can only occur if our investors are successful with the portfolios we manage.

Stipp: Thanks so much for calling in and joining us today, it was a pleasure speaking with you.

Gundlach: That's great. I look forward to speaking with you again. Remember, DoubleLine.com. And we look forward to serving investors in the future in the mutual fund industry.

Stipp: All right, thank you, Jeffrey.

Gundlach: Thank you. Bye now.

Stipp: For Morningstar, I'm Jason Stipp. Thanks for watching.