DoubleLine Fortune 500 Equal Weight ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an 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

Exxon Mobil

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A-Mark Precious Metals

Carvana

NRG Energy

Jackson Financial

Dell Technologies

Newmont Mining

MasTec

Tenet Healthcare

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Doubleline Fortune 500 Equal Weight ETF earns an Above Average Process Pillar rating. The leading factor in the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 92% also contributes to the process. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 28%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the Barclays Fortune 500 Equal Weighted Total Return Index.  Under normal circumstances, the fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities that comprise the underlying index, and or derivatives transactions that provide investment exposure to the underlying index or securities that comprise the underlying index. The fund will concentrate its investments in securities of issuers in any one industry or group of industries to the extent that the underlying index reflects a concentration in that industry or group of industries. 

 The portfolio is overweight in consumer cyclical and industrials relative to the category average by 7.8 and 5.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 18.2 and 4.4 percentage points of assets, respectively. The strategy owns 456 securities and its assets are more dispersed than peers in the category. In particular, 2.7% of the fund’s assets are concentrated in the top 10 fund holdings, as opposed to the category average's 49.5%.

Above Average

Process

DoubleLine’s  team is comparable to peers, resulting in an Average People Pillar rating. There are two managers listed on the fund: Jeffrey Gundlach, Jeffrey Sherman. The team is well equipped, with an average of 17 years of portfolio management experience. Though they do not manage other products together, managers may manage them individually.  

 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.

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 Fortune 500 Equal Weight ETF

DFVE tracks an equal-weighted index of US stocks, selected based on revenue. The portfolio is constructed from the Fortune 500 list.

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The dominance of a few large technology stocks in the S&P 500 has caused concern among investors, but there may be useful alternatives in the form of equal-weighting approaches or dividend-growth strategies.

Are Dividend Growth Funds Ready for Liftoff?

Today, DoubleLine brought to market two very different ETFs. One offers exposure to an equal-weighted index of Fortune 500 stocks while the other seeks to reflect the performance of the commodities-focused Barclays Backwardation Tilt Multi-Strategy Index.

New DoubleLine ETFs Target Commodities, Fortune 500 Equities

DoubleLine Commodity Strategy ETF

TAMPA, Fla. , Feb. 1, 2024 /PRNewswire/ -- The DoubleLine Fortune 500 Equal Weight ETF (ticker symbol DFVE) and the DoubleLine Commodity Strategy ETF (DCMT) began trading today on the NYSE Arca exchange.

News for Doubleline Fortune 500 Equal Weight ETF ETF (DFVE)