(Bloomberg) -- Bond managers from DoubleLine Capital LP’s Jeffrey Gundlach to Pacific Investment Management Co.’s Bill Gross are telling investors the worst may be over for Treasury bonds after 10-year yields rose to a 22-month high.

“I do believe July will not be the same type of month,” Gundlach, chief investment officer of Los Angeles-based DoubleLine, said yesterday in a webcast for investors. “There’s profits to be made in the bond market between now and the end of the year.”

Gross, in a Bloomberg Radio interview yesterday with Tom Keene, said 10-year Treasury yields can go 25 basis points, or 0.25 percentage point, lower, which would help reverse some of the losses in May and June.

Gundlach and Gross are telling investors not to panic after comments by U.S. Federal Reserve Chairman Ben S. Bernanke last week that the central bank may reduce its asset purchases sent markets lower across the world. U.S. stocks, commodities and Treasuries rallied yesterday as Fed officials said investors may have overreacted and the central bank will continue to spur growth if needed.

The Standard & Poor’s 500 Index climbed 0.6 percent to 1,613.20 at 4 p.m. in New York as 10-year Treasury yields lost six basis points to 2.47 percent. Yields went as high as 2.66 percent on June 24. The S&P GSCI gauge of 24 raw materials added 0.8 percent as oil surged 1.6 percent, while gold dipped to a 34-month low below $1,200 an ounce.

Decline Seen

Gundlach manages the $39 billion DoubleLine Total Return Bond Fund, which has averaged gains of 8.8 percent in the past three years to beat 99 percent of similarly managed funds, according to data compiled by Bloomberg. The fund has declined 0.4 percent this year, ahead of 81 percent of rivals.

Ten-year yields will be lower than where they are now by the end of the year and not by a “tiny amount,” Gundlach said yesterday. Interest rates won’t continue higher because of the economic impact, such as in the housing market, where affordability has been radically changed following an increase in mortgage rates and home prices, he said.

Mortgage rates for 30-year U.S. loans surged to the highest level in almost two years, a report yesterday showed. The average rate for a 30-year fixed mortgage rose to 4.46 percent from 3.93 percent, the biggest one-week increase since 1987, according to McLean, Virginia-based Freddie Mac. The rate was the highest since July 2011 and above 4 percent for the first time since March 2012.

Dudley’s Comments

Gross said the Fed has historically been too optimistic about the economy. Fed Bank of New York President William C. Dudley said the central bank may prolong the asset-purchase program that has fueled gains in global stocks and commodities should the economy fail to meet the Fed’s forecasts.

Gross’s Pimco Total Return Fund, the world’s largest mutual fund, with $285 billion in assets, has declined 3.6 percent this year, behind 88 percent of similarly managed funds, according to data compiled by Bloomberg. Over the past three years, the fund has returned an annualized 4.6 percent, ahead of 79 percent of rivals.

“We like 10-years, we like five years and we like safe assets that are overyielded and, like I say, underpriced,” Gross said during the radio interview.

Pimco Total Return had an estimated $1.32 billion in redemptions in May, according to Chicago-based Morningstar Inc., its first withdrawals since 2011. Gundlach’s fund is on track to have its first month of withdrawals this month since it opened in April 2010, with clients pulling an estimated $387 million through June 20, according to Morningstar.

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