The SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL), an actively managed TOTL represents bond king Jeff Gundlach’s initial ETF foray. And it is proving to be a successful one for the so-called bond king.
TOTL “drew $182 million of inflows in May, boosting its assets above $600 million in less than four months,” reports Jennifer Ablan for Reuters.
To be precise, TOTL, which debuted in late February, had $605.7 million in assets under management as of June 11. Amassing nearly $606 million in assets in just three and half months is impressive work for any ETF and TOTL’s asset-gathering proficiency means the new fund accounts for more than a third of the $1.7 billion in active ETF assets managed by State Street Global Advisors (SSgA).
SSgA is the fourth-largest issuer of actively managed ETFs with 8.45% of that growing market. As Reuters notes, TOTL is outpacing some of its marquee rivals. In what has become a rough environment for fixed income investors and fund managers as the bond market reacts to the possibility of an interest rate hike from the Federal Reseve, TOTL has fallen nearly 1.1% since coming to market. [Inside the New Gundlach, State Street Bond ETF]
That is not nearly as bad as the performances turned in by the PIMCO Total Return ETF (NYSEArca: BOND) and the Vanguard Total Bond Market ETF (NYSEArca: BND) over the same period. BND and the actively managed BOND are down 2.7% and 2.4%, respectively, since TOTL debuted.
“TOTL serves up a core fixed-income strategy and seeks to outperform the Barclays U.S. Aggregate Bond Index. At 0.55%, the ETF offers a less expensive way to benefit from Gundlach’s acumen than the 0.73% price tag for the retail share class of his DoubleLine Total Return Fund (DLTNX),” according to Morningstar. [Gundlach’s new Bond ETF]
Gundlach is one of a small amount of bond managers with the temerity to recently state that the Fed will not boost rates this year. TOTL has a modified adjusted duration of 3.89 years. The ETF currently holds 324 bonds, 54.4% of which are mortgage-backed securities.
A combined 21% of TOTL’s weight goes to high-yielding bank loans and emerging markets debt, which helps give the ETF a 30-day SEC yield of 3.15%, nearly 80 basis points above where 10-year Treasury yields closed Friday.
Core bond index strategies present challenges in a low-yield environment since the U.S. Treasuries heavy core-bond strategy would have seen yields diminish considerably and duration lengthen. Consequently, investors are now exposed to the lowest yield-to-duration ratio since the inception of the Barclays U.S. Aggregate Index.
SPDR DoubleLine Total Return Tactical ETF
