NEW YORK (Reuters) - Guggenheim Investments, overseen by high-profile bond investor Scott Minerd, posted net inflows totaling more than $1.1 billion into its fixed-income mutual funds and ETFs in May, the firm said on Thursday.
Guggenheim's flagship Total Return Bond Fund, an intermediate-term fund that has outperformed 98 percent of its rivals over one, three, and five years, according to Morningstar Inc, took in $527 million in May, the firm said.
The $6.7 billion Total Return fund has experienced net inflows for 41 consecutive months, Guggenheim added.
Minerd said the firm has become selective at buying credits, given the huge run-up in various asset classes and fears that Washington will not enact market-boosting policies.
"The ongoing struggle to draft a viable healthcare bill, the haste with which the (Trump) administration’s tax priorities were released, and the absence of an infrastructure proposal shows me that work still needs to be done to put the president's agenda into effect in a timely manner - meaning markets may come to realize that the Trump rally is long on promise and short on delivery,” Minerd said in an interview.
"These themes lead me to conclude that the best strategic direction for our portfolios in the medium term is to position for a flattening curve, with a positive view on credit performance, but a conviction to wait for more attractive levels to take on more risk."
Minerd said that with spreads tight in investment-grade and high-yield corporate bonds, loans, structured credit, and non-agency mortgate-backed securities, he expects an uptick in volatility this summer.
"While I see some near-term weakness ahead, our positioning for the themes I have identified should provide a sound long-term footing for our portfolios," he added.
Meanwhile, the Guggenheim Macro Opportunities Fund, a $5.5 billion non-traditional bond fund that has also outperformed 99 percent of its rivals over five years, took in $236 million in May, the firm said.
The Guggenheim Limited Duration Fund, a $1.7 billion short-term bond fund, has experienced 42 consecutive months of net inflows since its December 2013 inception. It has outperformed 99 percent of funds in its Morningstar category over three years.
Guggenheim said its BulletShares suite of defined maturity exchange-traded funds had $165 million in net flows in May. BulletShares now has a record $8.5 billion in assets under management.
Overall, Guggenheim has $161 billion in fixed-income assets under management.
Reporting by Jennifer Ablan; Editing by Jonathan Oatis