Gundlach Is Latest to Sound Corporate Debt Alarms: Credit Weekly

DoubleLine Capital has its lowest-ever allocations to speculative-grade bonds now, because valuations just don’t reflect the risks.

The money manager has been gradually cutting its high-yield bonds and other sub-investment-grade debt over the past two years, Jeffrey Gundlach, chief executive officer, said at the Bloomberg Global Credit Forum in Los Angeles this week. There are myriad risks, including inflation and tariffs, and investors aren’t getting paid for them, he said.

Spreads, or risk premiums, on US high-yield notes are around 3 percentage points now, according to Bloomberg index data. That’s well below the two-decade average of 4.9 percentage points, ...