- DoubleLine has launched the DoubleLine Ultrashort Income ETF (DLUX), an active ETF designed to optimize returns while maintaining high liquidity and low interest-rate risk.
- Priced at 18 basis points, DLUX provides a high-quality “fairway” trade for advisors seeking to capture yield without exposure to the extreme volatility of the current rate environment.
- The new launch follows recent mutual-fund-to-ETF conversions and the introduction of specialized funds like DABS and DMX.
DoubleLine continues to fortify its presence in the ETF market, adding a new active fixed income solution designed for today’s complex interest rate environment. The DoubleLine Ultrashort Income ETF (DLUX) launched on NYSE Arca on April 1, marking the latest expansion of the firm’s rapidly growing ETF lineup.
The launch comes at a time when financial advisors are increasingly seeking specialized bond expertise to navigate shifting market playbooks. “Despite a crowded market for active ETFs, many advisors turn to DoubleLine for bond expertise. It is great to see the team further build out its lineup,” Todd Rosenbluth, head of research at VettaFi, said.
DLUX enters the market with the objective of achieving attractive returns through the active management of liquidity, interest-rate, and spread risks. By managing these components daily, DoubleLine aims to provide optimal return opportunities relative to a short-duration index while prioritizing capital preservation.
The fund’s strategy hinges on high-quality credit exposure obtained through diversified holdings across government, securitized, and corporate bond markets. To mitigate volatility, the portfolio maintains very low levels of interest-rate risk, while liquidity is managed through both structural portfolio holdings and market depth across various sectors. The fund carries an expense ratio of 18 basis points.
How DLUX Fits in the Current Environment
At the Exchange conference last month, DoubleLine Deputy CIO Jeffrey Sherman provided an assessment of the macroeconomic headwinds facing bond investors. Sherman pointed to the belief that the Federal Reserve will “chicken out” and pivot to lower rates whenever economic pain points emerge.
However, Sherman expressed skepticism regarding an immediate pivot, arguing that the Fed is currently on autopilot until it sees true degradation in the labor market. He highlighted three regressive taxes hitting the consumer – inflation, tariffs, and rising fuel prices – as primary economic choke points.
In this environment, Sherman emphasized the importance of staying in the “fairway” by utilizing high-quality, ultra-short strategies that can capture yield without exposing advisors to extreme interest-rate sensitivity.
A Growing DoubleLine Active ETF Lineup
DLUX joins a suite of recently launched active DoubleLine ETFs, including the DoubleLine Asset-Backed Securities ETF (DABS ) and the DoubleLine Multi-Sector Income ETF (DMX ). While DABS focuses on the asset-backed securities market—including collateralized debt and bond obligations—DMX provides broad exposure across fixed income sectors ranging from investment-grade corporate debt to bank loans.
The firm also recently completed the conversion of the DoubleLine Securitized Credit Fund (DBLIX) into the DoubleLine Securitized Credit ETF (DSCO). This move transitioned the fund’s active income and total return strategy into the ETF wrapper, providing advisors with enhanced flexibility and tax efficiency.
Originally published on Advisor Perspectives.
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