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Gundlach: These are the best bets in slow-growth economy

Bond guru Jeff Gundlach is advising investors to bet against utilities and for real estate investment trusts.

Gundlach is CEO of DoubleLine, which manages $84 billion for clients. He has made prescient calls about the direction of bond yields and has been a frequent critic of the Federal Reserve. He believes the Fed and other central banks are keeping economic growth in check with low and negative interest rates.

"Maybe economic growth is supposed to be helped by negative interest rates, but that's not happening either," Gundlach said at the Sohn Investment Conference in New York. "It looks like negative rates aren't the solution, but that's because negative interest rates are the definition of deflation."

(Watch Gundlach's wide-ranging CNBC interview on Apple, Donald Trump and interest rates following his Sohn talk here .)

"Fighting deflation with deflation is like trying to put out your burning house by pouring gasoline on it," he said.

Gundlach advocated investors sell the Utilities Select Sector exchange-traded fund and buy the iShares Mortgage Capped Real Estate ETF.

He suggested investors leverage the companies one time, with an expected one-year return of 35 percent.