A caller on Sunday May 15, 2011 noted that in Bob's last Marketimer he made a change in the Income Portfolio going to the Double Line Total Return Fund.  The caller questioned the reason for that particular fund while noting it had a higher expense ratio.  He also questioned the duration.

Bob Brinker said he will publish the duration next month when he lists the funds.  Was this a planted caller to the show to get in a plug so people buy the newsletter to get this new fund information?  Feel free to answer here.

• According to Yahoo! DLTNX has a duration of 2.60 years.  This means if interest rates go up 1%, then this fund could see its net asset value fall by 2.6%.
• The expense ratio of the fund is 0.74%.  Expensive in these days of very low rates.
  

Bob Brinker said he selected that fund because he really likes the manager of that fund and thinks he has a lot of talent.  Bob acknowledged that it is a new fund however the manager has a long-term track record from work at his prior fund where he another income fund. Bob looked at his performance and found it was excellent so he thinks this can continue. (Hmmm... hopefully distractions from running his own shop don't eat into his time...)

The fund manager is Jeffrey Gundlach.  Gundlach was Morningstar's bond fund manager of the year in 2006 when he oversaw about $65 billion of TCW's $110 billion of assets before he was fired.

Warnings:

• Jeffrey Gundlach was manager of the TCW (Trust Company of the West) Total Return Bond Fund (TGLMX) which was the top intermediate-maturity bond fund, even outperforming Bill Gross¹s Pimco Total Return fund.  Gundlach was fired in December 2009 by TCW and he sued TCW.  TCW sued him, accusing him of "stealing confidential data, lying to potential clientes, and keeping drugs and pornographic materials in his office."  Story
  
• The Double Line Total Return fund that he now manages (tickers: DLTNX & DBLTX) has done very well since it started but it only has a record of just over a year.
• Can Jeffrey Gundlach get the same results without the same research team and resources of TCW behind him while he has to managage his own, new investment firm?
• Bob Brinker does not publish annual return data for this "income portfolio." He changed its name from "Fixed Income Portfolio" after he recently added equities. (Why didn't he add equities when the market was about 50% lower rather than now?)  This portfolio, well before he added equities, actually lost money in 2008, a year the total bond fund at Vanguard was up 5.24% and the Vanguard GNMA fund was up 7.22%!  We recommend "The Retirement Advisor" for safer fixed income portfolios.
  

Fund Facts    Retail and Institutional Class

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