While DoubleLine’s strategy may be associated with Jeff Gundlach, Sherman also noted that the investment thesis is backed by a large portfolio management team that implements a thorough vetting process in selecting component holdings. [Gundlach, State Street Bond ETF Goes Live]
Todd W. Lawson, relationship manager, national accounts at DoubleLine Capital, and David Mazza, vice president and head of research at SPDR ETFs and SSgA Funds, both mention how the new actively managed SPDR DoubleLine Total Return Tactical ETF includes difficult-to-access fixed-income assets and currently show a shorter duration than benchmark fixed-income indices for better risk management. The ETF seeks to enhance returns by exploiting inefficiencies within fixed-income sub-sectors while maintaining active risk management constraints.
Mazza argues that the core fixed-income index has become stagnant, with its heavy emphasis on U.S. government debt, but through an active approach, investors are able to gain exposure to areas of the marketplace that could help generate more attractive returns. TOTL currently includes a bias toward mortgage-backed securities at 37.3%, followed by industrials 20.4%, Treasuries 10.6%, finance 4.7%, emerging markets 4.7%, services/retail 2.8%, CMBS 2.7%, media 1.9% and healthcare 1.9%. Sector weights are based on the DoubleLine team’s economic outlook, fundamentals and relative value.
The ETF has a 3.06-year modified duration and a current yield of 4.39%.
Financial advisors who are interested in learning more about the fixed-income strategy can listen to the webcast here on demand.