DoubleLine Capital, a firm founded by Jeffrey Gundlach that subadvises some exchanged-traded funds for State Street Global Advisors, appears closer to entering the ETF market with its own funds after the Securities and Exchange Commission issued an order granting some requested exemptions.
DoubleLine plans to offer the DoubleLine Opportunistic Bond ETF and the DoubleLine Shiller CAPE U.S. Equities ETF, SEC filings show. Following an application filed by entities including DoubleLine ETF Trust, the SEC in a March 8 news release said granting the requested exemptions from certain sections of the Investment Company Act of 1940 was appropriate.
"DoubleLine isn't a new face in the ETF space," said Ben Johnson, director of global exchange-traded fund research for Morningstar, in an email. "The firm's February 2015 debut, SPDR DoubleLine Total Return Tactical ETF … proved popular right out of the gate."
Still, Mr. Johnson expects the two new funds to get a "lukewarm reception." He cited the performance of the SPDR DoubleLine Total Return Tactical ETF, which he said has lagged the Bloomberg U.S. Universal index by 0.65% annually from its inception through March 11.
"Ever since the firm launched the ETF offshoot of its flagship strategy, performance has been poor," Mr. Johnson said.
In addition to SPDR DoubleLine Total Return Tactical ETF, SSGA's website also shows DoubleLine as subadviser on the SPDR DoubleLine Short Duration Total Return Tactical ETF and the SPDR DoubleLine Emerging Markets Fixed Income ETF.
Like many of its peers, "DoubleLine has seen the writing on the wall," Mr. Johnson said, regarding the firm's expected official entry into the ETF space.
"ETFs are becoming the investment wrapper of choice for a growing number of investors," he said. "They need to be able to support their own homegrown ETF offering if they are going to remain relevant."
DoubleLine did not respond to emails seeking comment Monday and Tuesday.
