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Gundlach's Tactical ETF
03/18/2015 9:00 am EST
Doug Fabian, editor of Successful ETF Investing, asks, “What do you get when you marry the power and flexibility of an exchange-traded fund with the skill and track record of The New Bond King?”
The answer is the SPDR DoubleLine Total Return Tactical ETF (TOTL). This fund, issued by ETF pioneer State Street Global Advisors, is managed by DoubleLine Capital.
The lead manager, decision maker, and intellectual force behind TOTL, is Jeffrey Gundlach, CEO and CIO of DoubleLine Capital. Gundlach is considered by many on Wall Street to be one of the best bond fund managers in the market today.
He’s one of the smartest guys I know when it comes to bond investing and we think this fund is a great addition to our current mix of income-generating assets.
One thing I like about this ETF is that Gundlach will have much more flexibility to add various kinds of income-generating investments to this portfolio than he’s had in his mutual fund offering.
And, unlike bond index funds, TOTL can buy only the best-performing bonds for the portfolio, while also staying away from most indebted bond issuers.
TOTL’s charter says that the fund will incorporate a core fixed-income strategy that seeks to maximize total return over a full market cycle by actively investing across global fixed income sectors.
As for the current holdings in TOTL, they include mortgage-backed securities (37.3%), followed by industrials (20.4%), Treasuries (10.6%), finance (4.7%), emerging markets (4.7%), services/retail (2.8%), CMBS (2.7%), media (1.9%), and healthcare (1.9%). The ETF has a 3.06-year modified duration and a current yield of 4.39%.
I think TOTL will become one of the biggest—and best-performing—bond ETFs. I also expect this fund to deliver some outstanding gains.
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