Last month we purchased Fidelity Limited Term Bond (FJRLX) in our model portfolio. Part of our strat...
A "Best of DoubleLine" Fund
09/02/2016 9:00 am EST
Our Retirement Paycheck portfolio is for investors who primarily want income from their investments. It also has delivered capital gains to preserve purchasing power, explains income expert Bob Carlson, editor of Retirement Watch.
We take more risk than traditional retirement portfolios, because to earn a decent yield we have to venture beyond the basics of money market funds, certificates of deposit and short-term bonds.
This portfolio also owns the closed-end fund DoubleLine Income Solutions (DSL). The fund is co-managed by a team of managers from three DoubleLine funds, including Jeffrey Gundlach. I think of this is as a “best of DoubleLine” fund.
The fund is allowed to invest in almost any income investment in the global markets. It has a primary goal of generating a high level of current income and a secondary goal of earning capital gains.
Almost 70% of the fund is invested in different types of corporate bonds (including high-yield bonds and emerging market bonds). The fund recently increased its allocation to bank loans to 9.6%.
Most of the rest of the fund is in residential mortgage securities, commercial mortgage securities and asset-backed securities.
DoubleLine opines that emerging economies offer more value and opportunities than developed countries these days, so almost 45% of the fund is in emerging market securities.
The rest of the securities primarily are issued in the United States and Europe. About 18% of the fund is in high-yield corporate bonds from the different regions.
The recent yield was 9.41%. Unlike many closed-end funds, the distributions are paid only from income. The fund has about a 27% leverage ratio.
The fund sells at a discount to net asset value, which increased again in the last month to 5.53%. It returned 26.48% so far in 2016.
By Bob Carlson, Editor of Retirement Watch
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