Jason Stipp: Stepping back and looking at this from a fundholder's perspective, and what it means for a fundholder to move funds from one to another fund, if I were a fundholder in TCW Total Return, what would you say would be my reasons to stay, my reasons to leave? What should I be thinking about from that perspective? And why would you say your fund would be an option for me right now? Why would I come over? Make that case for me.
Jeffrey Gundlach: Well, one reason to stay in TCLMX would be that it's a low volatility fund anyway. Intermediate term bond funds are relatively low-risk anyway. And one that is two-thirds government guaranteed and one-third fairly cheap credit, it doesn't sound like a very bumpy ride for the time being. So TGLMX, when I left on Dec. 4, had a duration that was quite low. It was running an empirical duration of volatility similar to about the two-year Treasury. So it's not something that's going to bounce around and give you whiplash unless the fund is changed radically. And you'd have to ask the current management about ideas to radically change the fund.
Barring a radical change to the fund, it's simply a low volatility anyway, and therefore it seems to be a comfortable place to stay.
Another reason to stay, is an investor might be fond of the new investment team and might prefer their deliverable. It does rather beg the question as to why that investor was in TGLMX in the first place, though.
If somebody wanted the deliverable of the new investment team, they've had a mutual fund for many years. And it would have seemed that the investor would have chosen that. It seems obvious and pretty much non-debatable that over the course of time, TGLMX will no longer be the historical TGLMX.
It will the deliverable of a different team. The team that delivered the results of TGLMX that speak for themselves is completely absent from the process today. So you would stay possibly because you like that. But you could also stay, if you didn't like it that much, waiting for an option, because the fund probably isn't going to give you whiplash anyway in the near term.
Now, the reason to leave is that the team that put the deliverables together, that speaks for itself over the last decade--among the highest returns in the category with low Morningstar risk, not just below average, but low Morningstar risk for the last 10 years--is completely intact. It's very far along in developing a platform where the investors will find a safe and stable place.
And that platform will never be taken away, because these employees, the principles of DoubleLine, have a controlling interest in the firm, and therefore the investors will be able to have a safe place for their assets for many years to come.
We are committed to delivering every bit as good an investment deliverable as we did in the past, and enhancing the services around that, including client communications, reporting, et cetera.
So we think that we are upgrading the deliverable from what was already kind of a best in show when we were a team together at TCW managing TGLMX.