State Street’s (NYSE: STT) State Street Global Advisors, the second-largest U.S. issuer of exchange traded funds, and Jeffrey Gundlach’s DoubleLine Capital LP are partnering to launch an actively managed fixed income ETF.
The SPDR DoubleLine Total Return Tactical ETF is expected to be a direct competitor to the PIMCO Total Return (NYSEArca: BOND), the largest actively managed ETF. Assuming it comes to market, the SPDR DoubleLine Total Return Tactical ETF will trade on the New York Stock Exchange.
“The SPDR DoubleLine ETF will invest as much as 25 percent in corporate and sovereign high-yield debt, up to 15 percent in foreign-currency securities and a maximum of 25 percent in emerging markets,” Christopher Condon reported for Bloomberg.
Los Angeles-based Double Line currently offers 11 mutual funds including bond funds focusing on low duration bonds. The firm also offers multi-asset strategies as well as a mutual fund focusing on small-cap stocks.
This is not the first time State Street has teamed with a big name in the investment community on an ETF.
Earlier this year, SSgA and asset management giant MFS Investment Management partnered on three actively managed ETFs. Those funds are the SPDR MFS Systematic Core Equity ETF (NYSEArc: SYE), SPDR MFS Systematic Value ETF (NYSEArca: SYV) and the SPDR MFS Systematic Growth ETF (NYSEArca: SYG). All three charge 0.6% per year, reasonable among actively managed ETFs. [State Street, MFS Partner on Active ETFs]
SSgA has previously partnered with Nuveen and Blackstone on bond ETFs. The SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN) is just 14 months old and has over $609 million in assets under management.
ETF Trends editorial team contributed to this article. Tom Lydon’s clients own shares of BOND.