Interest rates remain near historic lows and the Federal Reserve does not appear to be in a rush to hike rates, but advisors and clients remain concerned about what the future holds for borrowing costs.
While forecasting the Fed’s next move has become increasingly tricky in recent years, advisors can gain a fixed income advantage by finding the right partners. On Wednesday’s webcast, Fine-Tuning Your Fixed Income Strategy, State Street Global Advisors and Jeff Gundlach’s DoubleLine Capital join ETF Trends to discuss ETF options for the current rate environment and beyond.
That includes the new SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL). The actively managed SPDR DoubleLine Total Return Tactical ETF is Gundlach’s initial entry into the ETF arena. Gundlach will be the portfolio manager for the new ETF, which will be advised by State Street Global Advisors.
“Investors are concerned about rising interest rates, they’re concerned about the bond market in general,” said said State Street Global Advisors Head of Research David Mazza in an interview with ETF Trends. “In investment-grade fixed income, active managers, particularly those with an expertise actually have the ability to consistently outperform. Now you can get access to it with the cost-efficiency and ease-of-use of an ETF.” [State Street, Gundlach to Partner on new ETF]
Mazza will be joined on Wednesday’s webcast by DoubleLine’s Todd Lawson, relationship manager, and portfolio manager Jeff Sherman.
The actively managed SPDR DoubleLine Total Return Tactical ETF comes to market at a time when fixed income ETFs are shattering inflows records. As of Feb. 12, bond ETFs had added nearly $20 billion in new assets this year. Five of this year’s top-10 asset gathering ETFs are bond funds. [Record Inflows to Bond ETFs]
Los Angeles-based Double Line currently offers 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. The firm reportedly pulled in $3 billion in new assets last month. TOTL, the new ETF, will charge 0.55% per year.
Increased demand for the products and the potential for a more favorable regulatory environment could make actively managed ETFs a $500 billion asset class by 2020, according to new report by SEI Investments.
For the week ended Feb. 13, there were 119 U.S-listed actively managed ETFs with a combined $18.8 billion in assets under management.
Advisors can register for Wednesday’s DoubleLine/State Street webcast here.