DoubleLine Launches New Exchange-Traded Funds DMBS and DCMB

Rhea-AI Summary

TAMPA, Fla., April 4, 2023 /PRNewswire/ -- DoubleLine launched two new ETFs: the DoubleLine Mortgage ETF (DMBS) and the DoubleLine Commercial Real Estate ETF (DCMB), now trading on the NYSE Arca. The Mortgage ETF aims to outperform the Bloomberg US Mortgage-Backed Securities Index by investing primarily in high-quality residential mortgage-backed securities. Managed by a team led by Jeffrey Gundlach, it seeks enhanced risk-adjusted returns. The Commercial Real Estate ETF focuses on senior commercial real estate debt and aims for capital preservation while employing active management for security selection.

Positive

• Introduction of two new ETFs: DMBS and DCMB, expanding DoubleLine's offerings.
• Targeted strategy of Mortgage ETF to outperform the Bloomberg US Mortgage-Backed Securities Index.
• Expert management team, including Jeffrey Gundlach.

Negative

• None.

TAMPA, Fla., April 4, 2023 /PRNewswire/ -- The DoubleLine Mortgage ETF (Symbol: DMBS) and the DoubleLine Commercial Real Estate ETF (DCMB), exchange-traded funds invested in fixed income securities actively managed by DoubleLine, began trading today on the NYSE Arca exchange.

"We are pleased to deliver these two unique exchange-traded funds to the marketplace as DoubleLine continues to broaden our ETF offerings to our valued clients," DoubleLine President Ron Redell said. For information on the DoubleLine ETFs, please visit this web page: https://doubleline.com/doubleline-exchange-traded-funds/#products

DoubleLine Mortgage ETF

The objective of the DoubleLine Mortgage ETF (or "Mortgage ETF") is to seek total return (capital appreciation and current income) that exceeds the total return of its benchmark, the Bloomberg US Mortgage-Backed Securities Index, over a full market cycle. The Mortgage ETF invests primarily in high-quality residential mortgage-backed securities (RMBS), allocating between government-backed Agency mortgage-backed securities (MBS) and non-Agency MBS. Interest rate, credit and prepayment risks are managed with the goal of delivering enhanced risk-adjusted returns through changing interest-rate and economic environments.

Portfolio managers of the Mortgage ETF are Jeffrey Gundlach, founder, Chief Executive Officer and Chief Investment Officer of DoubleLine; Vitaliy Liberman, Portfolio Manager overseeing DoubleLine's Agency MBS team; Ken Shinoda, Chairman of the firm's Structured Products Committee and Portfolio Manager overseeing the non-Agency RMBS team.

Although under normal circumstances the Mortgage ETF intends to invest primarily in residential mortgage securities deemed to be rated investment grade (i.e., securities rated Baa3/BBB- or higher) at the time of purchase, the Fund may also invest in certain other fixed income securities, including derivatives, U.S. government securities, and other cash and cash equivalents.

DoubleLine has broad discretion to manage the Mortgage ETF's portfolio duration; however, the investment team expects normally to construct an investment portfolio with a U.S. dollar-weighted average effective duration within two years (plus or minus) of the benchmark. Duration is a measure of the expected life of a fixed income instrument that is used to determine the sensitivity of a security's price to changes in interest rates. Effective duration is a measure of a duration adjusted for the anticipated effect of interest rate changes on bond and mortgage prepayment rates as determined by DoubleLine.

"Thirty years ago, thinking about the relative risks and rewards of fixed income sectors," Mr. Gundlach said, "I realized that Agency mortgage-backed securities offered superior characteristics versus U.S. Treasury bonds or corporate securities. Through active management, the MBS team and I have worked to make the most of those advantages. As the mortgage market evolved, we developed loan-level analysis to refine security selection and dynamic allocation within and between Agency and non-Agency MBS. The aim of these integrated tools is to manage risk through interest rate and credit cycles and to enhance returns. The Mortgage ETF delivers this time-tested investment framework in the vehicle of a DoubleLine exchange-traded fund."

DoubleLine Commercial Real Estate ETF

The objective of the DoubleLine Commercial Real Estate ETF (or "Commercial Real Estate ETF") is to seek current income and capital preservation. As a secondary objective, the fund seeks long-term capital appreciation. The fund invests in senior commercial real estate debt through investment grade commercial mortgage-backed securities (CMBS) and employs active management through security selection across commercial real estate (CRE) property types and subsectors while maintaining a low level of interest rate risk. The investment universe includes high-quality CRE debt across Agency CMBS, non-Agency CMBS and commercial real estate collateralized loan obligations (CRE CLOs). DoubleLine's experienced, long-tenured CRE specialists are responsible for security selection within their sector based on in-depth, fundamental research and granular property-level analysis.

Portfolio managers of the Commercial Real Estate ETF are Morris Chen, who heads DoubleLine's Commercial Mortgage-Backed Securities and Commercial Real Estate Debt team; Mark Cho, Portfolio Manager responsible for the team's CMBS credit platform; Robert Stanbrook, Portfolio Manager responsible for the team's CRE loan platform as well as its investments in CRE CLOs.

The CMBS and CRE Debt team expects to invest the Commercial Real Estate ETF primarily in instruments rated AAA to A- by S&P, at the time of purchase, or the equivalent by any other nationally recognized statistical rating organization.

Under normal market conditions, the portfolio managers intend to seek to construct an investment portfolio with a dollar-weighted average effective duration of three years or less.

"The commercial mortgage-backed securities market has adapted over the past decade with the evolution of underlying commercial real estate trends and government regulation. In more recent years, commercial real estate finance investments have repriced," Mr. Chen said. "This asset class diversifies from corporate credit and has structural enhancements that provide attractive relative values. The team employs granular underwriting of loan, borrower, property and market fundamentals while incorporating DoubleLine's macroeconomic views into portfolio construction. I'm pleased to see this investment approach, managed by my team in separate accounts and allocations in commingled vehicles such as mutual funds, available in the Commercial Real Estate ETF." 

About DoubleLine

DoubleLine ETF Adviser LP, adviser to the Mortgage ETF and the Commercial Mortgage ETF, is an investment adviser under the Investment Advisers Act of 1940. DoubleLine was founded in 2009 by Jeffrey Gundlach and 45 other partners. As of Dec. 31, 2022, DoubleLine had $92 billion in assets under management and 283 employees, including 109 investment professionals. DoubleLine's portfolio managers have 22 years of industry experience on average and have worked together on average for 16 years (including prior to the firm's founding).

DoubleLine's offices can be reached by telephone at (813) 791-7333 or by email at ETFinfo@doubleline.com. Media can reach DoubleLine by email at media@doubleline.com. DoubleLine® is a registered trademark of DoubleLine Capital LP.

A Fund's investment objectives, risk, charges and expense must be considered carefully before investing. The statutory prospectus contains this and other important about the investment company, and may be obtained by calling (877)-354-6311/(877)DLINE11, or visiting www.doubleline.com

Read them carefully before investing.

Risk Disclosures
Investing involves risk. Principal loss is possible. Equities may decline in value due to both real and perceived general market, economic and industry conditions.

ETF investments involve additional risks such as the market price trading at a discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a fund's ability to sell its shares.

Investments in debt securities change in value because of changes in interest rates. The value of an instrument with a longer duration (whether positive or negative) will be more sensitive to changes in interest rates than a similar instrument with a shorter duration. There is the risk that the Fund may be unable to sell a portfolio investment at a desirable time or at the value the Fund has placed on the investment. Illiquidity may be the result of, for example, low trading volume, lack of a market maker, or contractual or legal restrictions that limit or prevent the Fund from selling securities or closing derivative positions. There is risk that borrowers may default on their mortgage obligations or the guarantees underlying the mortgage-backed securities will default or otherwise fail and that, during periods of falling interest rates, mortgage-backed securities will be called or prepaid, which may result in the Fund having to reinvest proceeds in other investments at a lower interest rate. Derivatives involve special risks including correlation, counterparty, liquidity, operational, accounting and tax risks. These risks, in certain cases, may be greater than the risks presented by more traditional investments.

The Fund is a "non-diversified" investment company and therefore may invest a greater percentage of its assets in the securities of a single issuer or a limited number of issuers than funds that are "diversified." Accordingly, the Fund is more susceptible to risks associated with a single economic political or regulatory occurrence than a diversified fund might be.

DoubleLine ETFs are distributed by Foreside Fund Services, LLC

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SOURCE DoubleLine

FAQ

What are the objectives of the DoubleLine Mortgage ETF (DMBS)?

The DoubleLine Mortgage ETF (DMBS) seeks total return that exceeds the Bloomberg US Mortgage-Backed Securities Index over a full market cycle.

What is the focus of the DoubleLine Commercial Real Estate ETF (DCMB)?

The DoubleLine Commercial Real Estate ETF (DCMB) aims for current income and capital preservation, with a secondary objective of long-term capital appreciation.

When did DMBS and DCMB start trading?

The DoubleLine Mortgage ETF (DMBS) and the DoubleLine Commercial Real Estate ETF (DCMB) began trading on April 4, 2023.

Who manages the DoubleLine Mortgage ETF?

The DoubleLine Mortgage ETF is managed by a team led by Jeffrey Gundlach.

What types of securities does the DoubleLine Commercial Real Estate ETF invest in?

The DoubleLine Commercial Real Estate ETF invests in senior commercial real estate debt through investment grade commercial mortgage-backed securities (CMBS).