DoubleLine Capital has launched two new actively managed fixed income ETFs providing exposure to residential and commercial mortgage-backed securities.
Jeffrey Gundlach, Chief Executive Officer and Chief Investment Officer of DoubleLine Capital.
The DoubleLine Mortgage ETF (DMBS US) and DoubleLine Commercial Real Estate ETF (DCMB US) have been listed on NYSE Arca with expense ratios of 0.49% and 0.39%, respectively.
DMBS invests primarily in investmemt-grade securities, allocating between both government-backed agency RMBS and non-agency RMBS.
The fund’s portfolio managers include Jeffrey Gundlach, CEO and CIO; Vitaliy Liberman, Head of DoubleLine’s Agency MBS team; and Ken Shinoda, Head of DoubleLine’s non-Agency RMBS team.
The ETF seeks to manage interest rate, credit, and prepayment risks with the goal of delivering enhanced risk-adjusted returns through changing interest rate and economic environments. Under normal market conditions, the fund will maintain an effective duration within two years of its broad RMBS benchmark.
Jeffrey Gundlach commented: “Thirty years ago, thinking about the relative risks and rewards of fixed income sectors, I realized that agency MBS offered superior characteristics versus US Treasury bonds or corporate securities. Through active management, the MBS team and I have worked to make the most of those advantages. As the mortgage market evolved, we developed loan-level analysis to refine security selection and dynamic allocation within and between agency and non-agency MBS. The aim of these integrated tools is to manage risk through interest rate and credit cycles and to enhance returns. The DoubleLine Mortgage ETF delivers this time-tested investment framework in the vehicle of a DoubleLine exchange-traded fund.”
DCMB, meanwhile, invests in senior commercial real estate debt through investment-grade commercial mortgage-backed securities, including agency and non-agency CMBS, as well as commercial real estate collateralized loan obligations (CRE CLOs).
The ETF’s portfolio managers include Morris Chen, Head of DoubleLine’s Commercial MBS and Commercial Real Estate Debt team; Mark Cho, Head of DoubleLine’s CMBS credit platform; and Robert Stanbrook, who is responsible for DoubleLine’s CRE loan platform as well as the firm’s investments in CRE CLOs.
The fund diversifies across property types and subsectors while maintaining an effective duration of three years or less and a higher-grade credit profile consisting primarily of instruments rated AAA to A- by S&P.
DoubleLine’s CRE specialists are responsible for security selection within their sector based on in-depth, fundamental research and granular property-level analysis.
Morris Chen said: “The commercial mortgage-backed securities market has adapted over the past decade with the evolution of underlying commercial real estate trends and government regulation. In more recent years, commercial real estate finance investments have been repriced. This asset class diversifies from corporate credit and has structural enhancements that provide attractive relative values. The team employs granular underwriting of loan, borrower, property, and market fundamentals while incorporating DoubleLine’s macroeconomic views into portfolio construction. I’m pleased to see this investment approach, managed by my team in separate accounts and allocations in commingled vehicles such as mutual funds, available in the DoubleLine Commercial Real Estate ETF.”