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Gundlach’s DoubleLine gets the SEC green light to launch its first ETF

(Bloomberg) — Jeffrey Gundlach’s DoubleLine Capital LP is set to foray into $6.7 trillion ETF territory after approval from US regulators.

According to a Securities and Exchange Commission order this week, $134 billion of asset manager applications related to the DoubleLine Opportunistic Bond ETF (ticker DBND) and the DoubleLine Schiller Cape US Equities ETF (DCPE) have been granted “effective immediately.” This means the firm has the green light to launch.

DBND will track up to 50% of collateralized debt obligations in junk-rated loans and fixed-income securities including government notes. According to a filing, 5% of the portfolio could be holding defaulting corporate securities.

The new equity offering will reference the Schiller Barclays CAPE US Sector TR USD Index – which incorporates long-term investing principles set forth by Robert Schiller, the creator of the cyclically adjusted price-earnings ratio that combines valuations with inflation-adjusted earnings. make assessments.

DoubleLine, which recently moved its head office from Los Angeles to Florida, did not immediately respond to a request for comment. It is not clear how soon it will bring its funds to market.

The product will be the firm’s first official foray into the ETF industry, following other large holdouts such as Capital Group. Asset managers are increasingly introducing strategies into exchange-traded wrappers as money flows from mutual funds to cheaper, more tax-efficient ETFs. DoubleLine Fund will also join a wave of actively managed debuts in 2021 after a record year.

While the ETF will be DoubleLine’s first, the firm has three funds from State Street and one advisor from AdvisorShares.

The expense ratio of DBND and DCPE will be 0.5% and 0.65% respectively.

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