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Jeff Gundlach of DoubleLine Capital provided some detail on one of their new funds – the Multi-Asset Growth Fund (DMLIX) in a conference call today.  The presentation gave some insights into how he approaches the portfolio construction.  What differentiates Mr. Gundlach is his talent as a master allocator and risk manager.

In many ways, this fund appears similar to a lazy portfolio or an Ivy Portfolio – a broadly diversified fund that seeks to benefit from the potential growth and correlations (often inverse) of differing assets.  It removes stock picking (which I love), focuses on protecting the downside (by maintaining healthy cash levels) and utilizes a unique expertise in risk management and fixed income to generate high risk adjusted returns.  Mr. Gundlach elaborated on some of the bigger themes that drive growth:

  • When he doesn’t like markets he prefers to just get out (into cash).
  • The equity portion is not based on stock picking.  He sees stock picking as a waste of time and prefers to focus on sectors, industries & indices.
  • Capital preservation is just as important as portfolio growth.
  • You can see the composition below:

Update –  DoubleLine contacted me to clarify that the cash position will not necessarily be maintained at 30% and will likely be deployed over time.

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