Home to over $1.2 billion in assets under management, the SPDR DoubleLine Total Return Tactical ETF (NYSEArca: TOTL) is easily one of the most successful exchange traded funds of any type to come to market in 2015.
TOTL, managed by bond guru Jeff Gundlach, can also lay claim to be one of the most successful actively managed ETFs and one of the fastest-growing funds in that segment of the ETF market.
“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.
Financial advisors have been quick to embrace TOTL, helping the ETF gain momentum almost immediately following its February debut.
“The rapid takeoff by Gundlach’s ETF, however, is being spurred largely by an influx of advisors and other institutional investors. The sponsor of DoubleLine’s ETF, State Street Global Advisors, estimates that roughly 80% of TOTL’s inflow so far has come from advisors at wirehouses and RIAs,” reports Murray Coleman for Financial Advisor IQ.
What makes TOTL’s growth all the more impressive is, as Financial Advisor IQ notes, the ETF still is not available on all the ETF platforms advisors use, meaning some advisors still do not have access to the fastest-growing fund.
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
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.