The SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL), bond king Jeff Gundlach’s first entry into the world of exchange traded funds, is proving to be a quick success as it has topped $1 billion in assets under management.
To be precise, TOTL, which debuted in February, has $1.08 billion in assets under management, easily making it one of the most successful new ETFs to come to market this year.
“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.
“Barclays U.S. Aggregate Bond Index and fixed income asset classes outside the index with the goal of maximizing total return over a full market cycle through active sector allocation and security selection,” according to a statement issued by State Street on Wednesday.
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.
As a result, concerns over the impact benchmarks have on bond investments have pushed many investors to alternative investment styles, such as “total return” or “unconstrained” – active bond strategies that are not constrained by traditional indexing methodologies and adapt to changes in the interest rate environment.
TOTL provides a methodical combination of traditional rate sensitive sectors with non-traditional credit sensitive areas to generate returns and diminish risk while helping advisors skirt risks found in traditional bond index.
SPDR DoubleLine Total Return Tactical ETF
