Jeff Gundlach, founder of DoubleLine Capital LP, is reportedly giving Morningstar the cold shoulder, the Wall Street Journal is reporting.
Only a truly successful fund manager can afford to ignore the fund-rating company. A five-star rating from Morningstar can bring billions to managers — and a low rating can be a killer. Jeff Gundlach doesn’t care because he probably doesn’t have to. Are there others out there?
The WSJ says DoubleLine has been building resentment toward Morningstar over a number of years as the Chicago-based firm has either deemed one fund “not ratable” and slapped a “neutral” rating on a strongly performing fund. And then the wildly successful company only garnered an honorable mention in a Morningstar lineup of stars. The dis was not taken in stride. Morningstar analysts and fact checkers can’t get their phone calls returned. The WSJ observes:
The standoff between DoubleLine and Morningstar is being watched closely by other money managers as a test of the grip Morningstar has on the rest of the asset-management industry. Investors have continued to pour money into DoubleLine Total Return, which has consistently beat its benchmark, indicating that at least some fund managers can skirt Morningstar’s clout.
Mr. Gundlach “has a past track record that he can point to,” says Scott Kimball, a senior portfolio manager at TCH LLC, which manages $11.5 billion and is a subsidiary of BMO Global Asset Management. “There’s probably enough information to constitute a sound decision without having to rely on Morningstar.”
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