DoubleLine, an investment management firm and investment advisor with $134 billion in AUM based in Tampa, Fla., is branching out from its traditional management role to offer its first ETFs.
The two ETFs will be available Tuesday on the New York Stock Exchange Arca, the all-electronic exchange.
The funds are the DoubleLine Opportunistic Bond ETF (DBND) and the DoubleLine Shiller CAPE U.S. Equities ETF (DCPE), both actively managed by DoubleLine.
The DoubeLine Shiller CAPE U.S. Equities ETF is a real-time version of a highly successful smart beta, value investing strategy that the firm developed with Nobel Laureate Robert Shiller.
The fund identifies the five cheapest of 11 industry sectors, and then removes the sectors with the worst trailing 12-month total return, and invests in the remaining four sectors within the S&P 500. As a mutual fund, this strategy has managed to outperform most other smart beta strategies since it was introduced in 2014 during a period when growth funds easlly trounced value funds., DoubleLine said.
The mutual fund version of DCPE generated an annualized return of 17.7% for the five years ended December 31, 2021. Over that time period, it trailed the S&P 500 by less than 1%.
DoubleLine's entry into the ETF arena is being made to give its advisor clients access to active ETF products, which DoubleLine sees as a product generating growing interest with strong return potential, two DoubleLine executives said in interviews today.
“We heard from the advisor community that they want to be able to offer their clients an active ETF,” said Jeffrey Sherman, deputy chief investment officer at DoubleLine. “We are excited to be able to bring these ETFs to the marketplace.”
The offering does not herald a switch for the firm from its traditional role as an institutional investment manager, said Ron Redell, president of the DoubleLine Group.
The firm also announced the establishment of a platform, DoubleLine ETF Trust, and the DoubleLine ETF Advisor, to manage the ETFs.
“As steward of our clients’ investment capital, DoubleLine has diversified its distribution channels to match the preferences of investors and their intermediaries,” Redell said in a statement. “We are devoted to the clients who count on our existing investment vehicles, including mutual funds, other pooled-capital vehicles and separate accounts, while remaining open to new vehicles that win public endorsement.
“Actively managed ETFs are no longer a niche option among ’40 Act funds. In fact, active ETFs are well on their way to becoming a mainstay for many investors and advisors. We have formed the DoubleLine ETF Trust to serve them with a suite of actively managed ETFs, starting with DBND and DCPE,” he added.