Fixed income exchange traded funds are enjoying a banner year of inflows, but one of the biggest stories for bond ETFs this year is the entry of Jeff Gundlach’s DoubleLine Capital into the actively managed bond fund space with Tuesday’s debut of the SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL).
Gundlach, DoubleLine’s CEO and chief investment officer, will serve as the SPDR DoubleLine Total Return Tactical ETF’s portfolio manager along with Philip Barach, DoubleLine president, and Jeffrey Sherman, portfolio manager and participant on the firm’s Fixed Income Asset Allocation Committee.
Although passively managed ETFs have generally been more attractive to investors than actively managed counterparts, active bond funds have shown promise and represent one of the primary growth drivers for active ETFs. 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. [Inside Gundlach’s New ETF]
“The passive approach to ETF investing is increasingly popular with investors that struggle to find active managers that consistently outperform their peers and/or a common benchmark. According to the June 2014 S&P Dow Jones Indices Active vs Index Scorecard, the average active fund across various U.S. government, investment-grade corporate and high yield styles, lagged the respective Barclays index over three- and five-year periods. However, investment-grade intermediate-term funds were among the few styles where active management proved effective, with 66% and 61% outperforming the Barclays index over three- and five years, respectively,” said S&P Capital IQ in a new research note.
S&P Capital IQ sees Gundlach’s DoubleLine as a winner at a time of increased competition for investor assets among issuers of bond ETFs.