Gundlach's DoubleLine Adds EM, Short Duration Bond ETFs
Jeffrey Gundlach's DoubleLine Capital and State Street Corp (NYSE: STT)’s State Street Global Advisors (SSgA), the third-largest U.S. issuer of exchange-traded funds, tripled the size of their ETF partnership Thursday with the introduction of two new funds.
The two new actively managed ETFs, issued by SSgA and managed by DoubleLine, are the SPDR DoubleLine Short Duration Total Return Tactical ETF (BATS: STOT) and the SPDR DoubleLine Emerging Markets Fixed Income ETF (BATS: EMTL).
DoubleLine Capital and SSgA initially teamed up on the SPDR DoubleLine Total Return Tactical ETF (NYSE: TOTL), an ETF that represented Gundlach's initial foray into the ETF world. Just 14 months after coming to market, TOTL has over $2.2 billion in assets under management at time when some rival actively managed bond ETFs are struggling to gain and retain assets. TOTL is easily one of the most successful ETFs to debut in 2015.
The SPDR DoubleLine Short Duration Total Return Tactical ETF sports a modified adjusted duration of just 1.84 years and an average coupon of 2.14 percent. STOT has a yield to maturity of 1.11 percent. The new ETF is managed by Gundlach; Philip Barach, DoubleLine president; and Jeffrey Sherman, CFA and portfolio manager.
STOT “seeks to maximize total return over a full market cycle through active sector and security selection across a broad range of fixed income securities that could include, among others, securities issued or guaranteed by the US government, foreign and domestic corporate bonds, emerging market bonds and agency and non-agency mortgage backed securities,” according to a statement.
The SPDR DoubleLine Emerging Markets Fixed Income ETF has a modified adjusted duration of 4.69 years and an average coupon of 5.34 percent. EMTL, which holds over 1,100 bonds. Over 62 percent of those holdings are rated Baa or higher while 37.1 percent are rated below Baa. The new ETF will look to top the JP Morgan Corporate Emerging Market Bond Index Broad Diversified.
“EMTL is managed by Luz Padilla, director of DoubleLine’s International Markets Fixed Income Team, Mark Christensen and Su Fei Koo. The fund seeks to maintain a weighted average effective duration between two and eight years through active security selection that combines bottom-up research with sovereign macro overlay,” according to the statement.
The Exchange And Annual Expense Ratios
STOT charges 0.45 percent per year, while EMTL's annual expense ratio is 0.65 percent.
The two new ETFs also represent another coup for BATS, which has been pilfering ETF listings from rival exchanges while also attracting its fair share of new ETFs.
“Bats ranks as the top exchange operator for ETF trading with the Bats Exchanges – BYX, BZX, EGDA, EDGX – executing 26.2 percent of all ETF trading in February. Bats was the #1 U.S. market for ETF trading for every month of 2015 and the #2 U.S. market for overall equities trading,” according to Bats.
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