Strength in DoubleLine Opportunistic Bond ETF's People Pillar is partially offset by an Average Process Pillar rating, leading to a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy receives an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in corporate bonds and AA rated bonds compared with category peers. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. DoubleLine Opportunistic Bond ETF earns an Average Process Pillar rating.    The main driver of the rating is the firm's five-year retention rate of 92% over the period. Management team experience, which averages 24 years at this fund, also strengthens the process. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 25%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the Intermediate Core-Plus Bond Morningstar Category, this fund has been consistently sensitive to interest-rate changes over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the average strategy in the category, the managers have been substantially underweight corporate debt in recent years. In the latest month, the strategy has also relatively underweighted corporate debt compared with Morningstar Category peers. Additionally, there's been a notable underallocation from AA rated bonds over the past few years. Similarly, in recent months, the strategy also had less exposure to AA rated bonds than peers. Finally, during the past few years, the fund leaned towards debt with three- to five-year maturities. In this month, the strategy also leaned more towards debt with three- to five-year maturities compared with its peers.

 This strategy has a 4.6% 12-month yield, higher than its average peer's 3.9%. Typically, higher yields come at the cost of higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BBB.

Average

Process

DoubleLine Opportunistic Bond ETF earns an Above Average People Pillar rating. The team is backed by Jeffrey E. Gundlach, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.7 stars, indicating that their risk-adjusted returns have been in line with the category average. Despite having a small team, the two listed managers boast 24 years of listed portfolio management experience. As a team, they manage 22 investment vehicles together, with mixed prospects. The asset-weighted average Morningstar Medalist Rating across the strategies is Neutral. This means, in aggregate, they are not positioned to deliver positive alpha. The highest personal investment in the fund by any of its managers is between $100,000 and $500,000. That's on the low side--it would need to be more than $1 million for us to see the investment as sufficient to promote the strong alignment of their interests with the strategy's investors.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Above Average

People

DoubleLine Capital is on solid footing, with a few areas to watch, supporting its Average Parent rating.
The firm has grown into a solid fixed-income shop since Jeffrey Gundlach launched it in 2009. The now 275-person firm counts managers and analysts who followed him from TCW. Of particular importance are portfolio managers Andrew Hsu and Ken Shinoda, who are likely to take the reins on firm flagship DoubleLine Total Return, which together with related strategies comprises half of the firm’s USD 96 billion in assets under management as of March 2023. An impressive team of analysts and traders supports the fund, which is a marquee example of the firm’s demonstrated expertise in managing securitized debt strategies.
That said, the firm’s success remains inextricably linked to Gundlach. Although he hasn’t been directly involved in trading for years and has a likely successor in deputy CIO Jeffrey Sherman, Gundlach’s experience, reputation, and influence mean his eventual departure could put money in play. On the heels of weak performance in 2019 and 2020, DoubleLine Total Return has seen USD 18 billion in outflows since January 2020 despite good returns in 2021 and 2022.
DoubleLine has added equity and multi-asset offerings and has branched into exchange-traded funds, which helps diversify the business. Not all endeavors have been successful, including the firm’s recently shut fundamental-equity business.

Parent

Doubleline Opportunistic Bond ETF

DBND is an actively managed, fixed income fund comprised of securities from corporate and government issuers, with various credit ratings, and a dollar-weighted average effective portfolio duration of two to eight years.

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News for Doubleline Opportunistic Bond ETF ETF (DBND)