Jeffrey Gundlach and the Lipper Award

TCW Total Return Bond Fund (TGLMX) received a Lipper Award for its five- and ten-year performance. Jeffrey Gundlach was at the helm of the fund for most of this time period, yet someone else receives the award. We are not going to get into the details of Jeff Gundlach's nasty battle with TCW, but it is clear that investors should discard the information about TGLMX's Lipper Award or long-term performance when they decide to invest in the fund. Josh Brown penned a detailed article about this issue:

The problem with this - and the thing that investors need to know - is that these award-winning results were actually generated by Jeffrey Gundlach and his team, about 30 of whom departed TCW in December of 2009. Anyone who had been given trading authority by Gundlach or had worked closely with him, learning his process, has already followed him to his new shop, DoubleLine.

Leaving aside all of the lawsuits and ugliness between TCW and Gundlach upon his departure, if we focus solely on the portfolio management and returns since, we see that the Lipper award and TCW’s attendant PR announcement might be very misleading to investors.

The problem with this - and the thing that investors need to know - is that these award-winning results were actually generated by Jeffrey Gundlach and his team, about 30 of whom departed TCW in December of 2009. Anyone who had been given trading authority by Gundlach or had worked closely with him, learning his process, has already followed him to his new shop, DoubleLine.

Leaving aside all of the lawsuits and ugliness between TCW and Gundlach upon his departure, if we focus solely on the portfolio management and returns since, we see that the Lipper award and TCW’s attendant PR announcement might be very misleading to investors.

Read the rest here.

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