Jeffrey Gundlach cautious on High Yield, also sees Munis 15-20% lower

By Edward Harrison On Mar 9, 2011

Jeff Gundlach, a well known bond manager and DoubleLine Capital CEO, was on CNBC today talking about munis and high yield, two bond asset classes that have been moving in different directions of late. He was cautious on both classes saying that the yields in high yield were priced for low default rates and did not adequately compensate for high volatility. He doesn’t think high-yield is about to tank, but he is still cautious on the asset class. On munis, Gundlach said that he is "agnostic" a potential crash. Nevertheless, he believes "the fundamentals are bad" and sees munis going "at least 15 to 20%" lower.

Very good interview. Video clips below.

Source: Jeffrey Gundlach Is the King of Bonds – Barrons.com

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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