From its inception in October 2013 through May 31, 2015, it has realized an annualized return of 17.62%, compared with 14.58% for the index. So far this year through June 1, 2015, it has returned 5.50%. Morningstar, which classifies the fund in the large value group, ranked it first in that category in 2014. Through June 1 of this year, it ranked 6th out of 273 institutional classes of funds in the large value group.
Another attraction is the marquee names attached to the fund. The equity side features an index that combines the names of a Nobel Prize-winning economist in the world with a global fixed-income juggernaut. Since its launch in early 2010, DoubleLine has attracted some $75 billion in assets under management making it the most successful start-up in mutual fund history.
Not A Balanced Fund
Despite two distinct stock and bond sides, this is far from a typical balanced fund. Instead, it is managed to generate returns mainly from its equity index component, while the fixed-income side acts as something of an icing on the equity cake. Each investment dollar goes into an actively managed fixed-income portfolio of short- to intermediate-term securities designed to deliver long-term rates in line with LIBOR plus 250 basis points, with low volatility. Simultaneously, the fund enters an index swap to mirror the movement of the underlying index. By using the swap contracts, the fund gains 100% exposure to stocks while also investing in a portfolio of bonds. The portfolio has no financial leverage because no money is borrowed to increase the net exposure of the portfolio.