On Tuesday, DoubleLine unveiled the DoubleLine Asset-Backed Securities ETF (DABS), the latest offering to join its fund suite.
DABS is an actively managed fund that offers long-term total return along with current income. This fund has a net expense ratio of 39 basis points.
As the fund’s title implies, DABS focuses its investments toward asset-backed securities. This includes asset-backed securities of any kind, including collateralized debt loan, and bond obligations.
Investment grade asset-backed securities remain the core investment focus of the fund. That being said, the fund may also opt to invest in unrated or high yield fixed income securities.
Asset-Backed Advantages
“The growth in the ABS market, both in size and breadth, has resulted in new opportunities for investors in terms of current income, risk-adjusted return and diversification, particularly with respect to traditional credit,” noted Andrew Hsu, CFA, portfolio manager, Structured Products at DoubleLine. “DoubleLine’s tenured Asset-Backed Securities team manages $4.7 billion in ABS in multi-sector portfolios. Investors now have access to a pure play in diversified, high-grade ABS through an actively managed exchange-traded fund.”
As an actively managed fund, the DoubleLine portfolio team intends to invest in securities backed by a variety of asset types. This can help the fund respond to changing macroeconomic trends that could affect investment values.
Managing portfolio duration to navigate exposure to interest rate risk is another perk of the fund’s active management. That being said, the fund expects to hold an average effective duration that sits between one and six years.
DABS is just the latest innovative fund from DoubleLine to join the ETF market. DoubleLine now has eight different ETFs listed in the United States, which significantly amount to over $1.3 billion in assets under management.
“DoubleLine has brought yet another creative niche ETF to the field with its latest launch,” added Kirsten Chang, Senior Industry Analyst at VettaFi. “Across the fixed income landscape, advisors are increasingly looking to alternatives to traditional avenues of credit, especially given corporate spreads are historically tight.”
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