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DoubleLine Debuts Dynamically Managed Strategic Commodity Fund

By DailyAlts Staff Led by the new “Bond King” Jeffrey Gundlach, DoubleLine Capital has been one of the hottest asset managers since its founding in December 2009. In addition to the firm’s institutional and sub-advisory businesses, DoubleLine also makes a number of its investment strategies available via its own line of mutual funds and closed end funds. On August 31, DoubleLine Funds added one more fund to its roster: the DoubleLine Strategic Commodity Fund (MUTF: DLCMX ), a ’40 Act mutual fund managed by DoubleLine Commodity LP. Through the fund, retail investors with as little as $500 to invest via their IRAs can gain access to DoubleLine’s Strategic Commodity strategy. The new fund’s objective is to seek long-term total return. In pursuit of this goal, the fund’s portfolio manager will employ to two distinct approaches: A long-only strategic allocation to commodities and A long/short tactical allocation to individual commodities. In practice, the fund seeks returns by means of long exposures to one or more commodity indexes, and long and short exposures to individual commodities. It achieves these exposures primarily through derivatives contracts, as well as individual securities and other instruments with returns tied to commodity indexes, baskets of commodities, individual commodities, or a combination thereof. The fund’s portfolio manager is Jeffrey Sherman. Mr. Sherman is a portfolio manager for DoubleLine LP’s derivative-based and multi-asset strategies, and he’s supported in his management of the new fund by analysts and traders in DoubleLine’s Cross Asset Team. “The rationale for investing in commodities has several components,” said Mr. Sherman, in a recent statement. “A broad mix of commodities historically has shown low correlations to stocks, bonds and cash. So commodities can diversify a portfolio invested in traditional asset classes.” Mr. Sherman, who will be holding a webcast on September 29 to discuss the fund and answer questions, also noted that commodities have inflation-hedging properties, and that “incremental returns potentially can be obtained by exploiting the term structure of prices of individual commodities.” Shares of the DoubleLine Strategic Commodity Fund are available in I (MUTF: DBCMX ) and N ( DLCMX ) classes. I shares have a $100,000 minimum initial investment and a 1.11% net-expense ratio; N shares have a $2,000 minimum initial investment and a 1.36% net-expense ratio. For IRAs, the initial minimums are $5,000 and $500, respectively. For more information, visit the fund’s web page .

Gundlach’s DoubleLine Launches First ETF

By Alan Gula Pacific Investment Management Co. (PIMCO) is facing an investor confidence crisis. The storied bond firm experienced over $150 billion of mutual fund outflows in 2014. And PIMCO’s flagship Total Return Fund is now 54% smaller than it was at its peak in April 2013, when assets under management (AUM) reached $293 billion. The exodus intensified after the abrupt and unceremonious departure of Co-Founder Bill Gross in September 2014. But one firm has benefited greatly from the turmoil at PIMCO : DoubleLine Capital. Headed by Jeff Gundlach, DoubleLine saw its 13th consecutive month of net inflows in February, following a record monthly net inflow in January. With good reason, Gundlach is being hailed by many as the new “bond king.” And just last week, Gundlach’s DoubleLine launched its first exchange-traded fund (ETF), which will surely intrigue fee-conscious fixed-income investors. DoubleLine has partnered with ETF pioneer, State Street Global Advisors, to offer the SPDR DoubleLine Total Return Tactical ETF (NYSEARCA: TOTL ). DoubleLine’s lineup includes successful open-end mutual funds and closed-end funds, but this is its first ETF. The firm will actively manage TOTL, allocating capital among different fixed-income sectors using a top-down macroeconomic approach and selecting securities via bottom-up analysis. With 114 funds, the ranks of actively-managed ETFs are growing. However, with under $20 billion in aggregate AUM, it’s still a nascent area. PIMCO’s Total Return ETF (NYSEARCA: BOND ) is perhaps the most popular actively-managed bond ETF and has $2.5 billion in AUM. Although bond fund investors are typically long-term oriented and don’t necessarily need intra-day trading liquidity, ETFs often carry lower fees than their mutual fund counterparts. This is the case with TOTL, which has a net annual operating expense of 0.55%. This compares favorably to the investor share class of the DoubleLine Total Return Bond Fund N (MUTF: DLTNX ), which carries a fee of 0.73%. The institutional shares levy a 0.48% expense ratio, but you’ll have to pony up $100,000 to meet the minimum investment requirement. DoubleLine’s Total Return Bond Fund outperformed 91% of its peers in 2014, according to Bloomberg data. Like DoubleLine’s flagship fund, TOTL is an intermediate-term bond fund… but its mandate is a bit broader. Investments can include Treasuries, mortgage-backed securities (MBS), domestic and foreign investment-grade corporate bonds, foreign government bonds, including emerging markets, floating rate securities, etc. The fund will maintain at least 20% of its assets in MBS or securities with government guarantees, whereas DLTNX aims to maintain MBS exposure of 50% or greater. DoubleLine’s tactical ETF may invest up to 25% of its net assets in high-yield bonds. The fund will target a lower duration (interest rate risk) than that of the benchmark Barclays U.S. Aggregate Bond Index. Therefore, a rising interest rate environment (which is not my forecast, but is possible) should have a muted impact. DoubleLine’s first ETF, and its latest in an array of quality offerings, is an exciting development for both the firm itself and fixed-income investors looking for additional fund choices and lower fees. At its peak, PIMCO managed over $2 trillion. At the end of 2014, DoubleLine managed a much smaller, but quickly growing, $64 billion. Of course, performance, not size, should be used as a yardstick for greatness. And there’s no doubt in my mind that DoubleLine is already a giant in the industry. Original Post