By Jennifer Ablan
NEW YORK (Reuters) - Jeffrey Gundlach, a widely followed investor who oversees DoubleLine Capital, said in an interview on Monday his firm had purchased "lots of Treasuries and Ginnie Maes" on Friday, ahead of new developments in the Greek and Puerto Rico crises.
The U.S. Treasuries market rallied on Monday, with yields falling to one-week lows, as a breakdown in talks between Greece and its creditors stoked bets Athens would default on its debt.
"The risk-reward set-up was favorable," Gundlach said. "The 30-year Treasury went to a new high yield and no other part of the curve did. This was exactly the opposite of what happened at the low in yields in January."
The 30-year bond was up on Monday more than 2 points in price for a yield of 3.103 percent, down nearly 15 basis points from Friday.
Gundlach said he purchased Treasuries and Ginnie Mae mortgage-backed securities because even if yields had accelerated higher, the view was that high-yield "junk" bonds and Emerging Market debt would do worse than Treasuries.
"Also, we had significantly outperformed quarter-to-date, having been defensive on rates and the thesis was no longer as compelling with rates up so much," he added.
Gundlach said he knew to purchase long-duration assets such as Treasuries and Ginnie Maes because the Shanghai Stock Exchange Composite Index (SHCOMP) was "signaling trouble by collapsing after blowing off to the upside a la the Nasdaq back in 1999/2000."
(Reporting by Jennifer Ablan; Editing by Bernadette Baum)
