Thanks. The webcast transcript highlights the differences in the portfolios of the two funds much more precisely, but the reasoning is still not entirely clear. The scope of DSL seems to be more global/emergings mkts oriented but both seem to be go anywhere. The transcript for the webcast is here:
http://doublelinefunds.com/pdf/3-25-14_Webcast_Recap.pdf

on sep 16, Gundlach had a webcast about DSL and DBL at doublelinefunds.com. Did you listen to it? Might have answer you are looking for.

... Unconstrained Bond Fund ... Share Classes are A, B, C, D, I, N, T, R, S. Classes I (institutional) and N (not sure what it stands for) have the least expensive ratio. ... I am thinking of placing some money in the fund (assuming I can get in Classes I or N) and there is no transaction fee. I checked Vanguard and Schwab and they do not offer the classes I am interested in .

As rjb112 listed in another thread the fund has "only" seven share classes - no B shares, no R shares. (Almost no fund sells B shares anymore, and likely no new fund is going to create that share class.) You can find my summary of who the seven share classes are for in my followup to rjb112's post.
I tried to paraphrase and summarize Janus' descriptions of its share classes. If you'd like Janus' official descriptions, you can find them (except for D, but including R) in the prospectus for Janus Flexible Bond Fund, Shareholder Guide Section here.
The D class shares are grandfathered for investors who already have investments directly through Janus (not through a broker/retirement plan). If that's not you, you don't need to think about them, you can't get in.
It's really very simple - if you're a new retail investor, and you don't want to pay a load, you'll buy T shares. End of story. Janus is not like PIMCO, where you might be able to get Institutional Share class shares if you go through the right broker, or you might buy D shares, or ???

Another fund with few stocks is Cobyx (I think) which is Cook and Bynum. Last time I looked at its website the fund was holding 8 stocks. Take COBYN and Fairholme and you can be a portfolio manager - - just keep up with their website postings and read this forum for updates.

Found it, COBYX, 7 stocks.....

Gross is now the manager of Janus Unconstrained Bond Fund which started in May 2014 and has, depending on the share class, about $13 million. Share Classes are A, B, C, D, I, N, T, R, S. Classes I (institutional) and N (not sure what it stands for) have the least expensive ratio. Class I is .84 and Class N is .82; there is a waiver on OER until 11/2015. I am conservative investor, don't sell or buy much, don't chase trends but I must admit I am thinking of placing some money in the fund (assuming I can get in Classes I or N) and there is no transaction fee. I checked Vanguard and Schwab and they do not offer the classes I am interested in .

PRIHX has same manager as Gold-rated PRFHX, which has Avg Eff Duration of 5.62 Yrs

I looked up some analyst reports on AIG.
Almost all analysts had basically a neutral rating.
Morningstar has a fair value estimate of $60.
The only strongly positive rating I saw was the Schwab Equity rating, which was the highest rating category they have.
Is Bruce Berkowitz seeing what other analysts are not?
I know there are some prominent value funds that own AIG, but don't recall them off the top of my head. Possibly some of the Oakmark funds?

Someone please check my arithmetic.
$3.6B ETF, $81.9M net withdrawals.
$81.9/$3,600 = 0.0255 = 2.55%
Where is this 13% coming from?

@msf: Here's what I get: 2.275%

So yes, agree with you. Have no idea where this 13% is coming from.

Were there not outflows ongoing before the Gross departure?

Since the net outflows for the ETF YTD through August were $50.4 million, and the net outflows YTD excluding Friday (as near as I can tell, Reuters and Bloomberg agree on this figure) were $71 million, we can figure that the net outflows in Sept, prior to Gross leaving, were about $20 million.
What I don't have any citation or info for is whether the August inflows continued until a few days ago when the SEC inquiry was announced.

The mid-decade rally is scheduled to begin September 30. Historically the next 18 months have been very bullish:
http://jayonthemarkets.com/2014/06/25/september-30th-mark-your-calendar/

Someone please check my arithmetic.
$3.6B ETF, $81.9M net withdrawals.
$81.9/$3,600 = 0.0255 = 2.55%
Where is this 13% coming from?
(M* says that BOND has $3.57B, so the Reuters figure on fund size seems about right, even after the $10.9M withdrawal, which would be what, a third of a percent or so?)
I also suspect that what Bloomberg did to get the supposed $81.9M in net withdrawals was to take a previously reported figure of $71M and add $10.9M. They forgot that $71M was rounded to the nearest million; for all they knew, the "exact" figure was $71.1M. When you add rounded numbers, you keep the rounding - the most precise figure they could likely give for net outflows would be $82M, not $81.9M.
None of this is to suggest that PIMCO may not see large outflows. It's just to question basic arithmetic (and by implication, the reporting in general).
Another factoid - through August, YTD outflows on BOND were $50.4 million (note the precision). June, July, and especially August were big inflow months (+$87million in Aug alone). So the market had already turned swiftly and viciously on the fund - to have gone from +$87million in Aug to -$21million between Sept 1 and Sept 25th.
Given this background, was the $10.9 million outflow on Friday so extraordinary? (For all I know, the inflows continued for much of Sept, and just reversed on the recent announcement of the SEC probe. )
There's a footnote at the bottom of the Bloomberg article saying that the article was "corrected" to remove an explicit linkage between Gross' departure and the outflow. But then what, pray tell, is the point of giving a one day outflow figure from a fund right at the time of Gross' departure?

Just watched the Wealthtrack interview. I was impressed with Berkowitz's answers on why he believes he is and was right to invest in AIG, Bank of America, Fannie Mae and Freddie Mac. I also thought that Consuelo Mack asked poignant questions. I didn't come away with the feeling that this was a softball interview. Regarding Sears Holdings, I would have liked this asked of Bruce Berkowitz. Not sure why it wasn't.

Concur with all of that. Wondering about the disconnect between the way BB values AIG and the way the market values it. BB says it is worth $75 to $100. Yes, Consuelo Mack does a fine job. And she does ask some excellent questions, and not give a softball interview, even though Fairholme is a sponsor of the show. She did the same with David Winters of Wintergreen, asked some tough questions even though they also sponsor the show.

@Ted, see http://www.mutualfundobserver.com/discuss/discussion/15851/fairholme-fund-s-bruce-berkowitz-on-this-weekend-s-wealthtrack#latest

Did you watch his interview on Wealthtrack yesterday or today?
http://www.mutualfundobserver.com/discuss/discussion/15851/fairholme-fund-s-bruce-berkowitz-on-this-weekend-s-wealthtrack#latest
It was very interesting. Makes his case for AIG, BAC, Fannie and Freddie, which together make up 80% of the portfolio.

"Why is the market only valuing AIG at 0.7x book value?"
Maybe they're still thinking in the manner that Berkowitz did in 2009.
"Maybe it's because I don't invest in things I can't understand. Eighteen years ago, after the financial stocks got killed, I was a big buyer of Wells Fargo, Freddie Mac and MBIA. They were simpler businesses then -- and they were cheap and understandable. You could read an annual report or a 10-K and you knew what you were getting.
Or take American International Group. If you looked at an AIG annual report six or seven years ago, you saw one paragraph on derivatives. You look at an AIG annual report today and you see 15 pages on derivatives. I don't think company insiders fully understand what's going on, let alone outsiders. So if I don't understand something, I've learned to walk away." (http://www.kiplinger.com/article/investing/T041-C000-S002-a-bargain-hunter-stands-tall.html)
From the same interview:
"What's the worst that could happen to Sears, one of your biggest holdings?
It gets slowly liquidated, or Eddie Lampert, its chairman, takes the company private. But I don't think he'd do that to shareholders.
"We didn't buy Sears based on the business. There's too much retail in the U.S. (note: my emphasis, and my curiosity as to where the demand for retail space will come from for large Sears spaces if there's already too much retail in the US, which is something I agree with....)If the retail works, then it's a grand slam home run. We invested because of the company's real estate holdings. It has some fabulous locations -- a Kmart in Bridgehampton, N.Y., and a Sears on PGA Boulevard in West Palm Beach, Fla., for instance. The real estate alone is conservatively -- and I mean conservatively -- worth $90 per share [the stock traded at $53 in mid November]."

I was impressed with BB and his case for AIG.
Why is the forward P/E for AIG higher than the trailing P/E? I don't recall seeing forward P/E's lower than trailing P/E's.
Why is the market only valuing AIG at 0.7x book value?
M* has a fair value estimate of AIG of $60. BB thinks it is worth $75-100
His case for Fannie and Freddie is interesting too. I guess the courts and the gov't will decide that.

Also have a look at this thread, where MFOers discuss owning a portfolio of div growth stocks, which is the cheapest alternative of all if you have enough funds and aren't DCAing.

So a few come to mind.
1) Why are you worried about ERs, especially on a funds that are already fairly low cost? This is meant honestly, not as an active/passive debate question. There is some evidence Vanguard's active funds outperform their indices, and VIG has trailed VDIGX over all meaningful time periods since inception.
2) Why are you looking to replace a fund that is looking for opportunistic values in the mid-cap space with one that seeks dividend growth in the large/giant cap space? A dividend growth strategy will very rarely be a value one since you're buying earnings of well known names. These funds behave very differently.
3) What does this do to your asset allocation? VCVLX has a big chunk of some foreign in there, as well as a lot more all-cap names. VIG is an all-American index focusing on steady-eddie type equities.
4) Are there tax implications?
5) Are there any other reasons for the move besides ER?
FWIW, to my mind you might be looking the wrong way 'round. There really isn't an ETF replacement for PRWCX because it uses a very specific active strategy (using preferreds and convertibles for value/arbitrage purposes, to increase income, and to mitigate volatility in a core fund). However, if you're looking to replace it with another core equity fund, a dividend growth strategy like VIG, SCHD, or VDIGX is probably as close as you're going to get.

In my effort to reduce the ER, to swap vcvlx(Vanguard Capital [email protected]) to vig ( Vanguard Dividend Appreciation ETF @0.10) under Large blend category: what factors should I consider? Thanks in advance. I am still searching for etf alternative to prwcx ( @0.75).

I'm a big fan of the concentrated go-anywhere fund as well and I also prefer low AUM so there's no problem with flexibility. As has been said, though, I think its a bigger bet on the manager than in more diversified funds, and I like that because then I feel like I'm really getting something for my expense ratio. The more of his/her own money the manager has invested the better.
At the same time, @JohnChisum, I think there are any number of cases where funds hold more positions and do just as well or better than focused funds. Berkowitz has done very well over the long run but others haven't which to me is an indication of the relative value the manager is adding.
@Amir, I think there are other focused funds throughout the various categories, maybe not as focused as Berkowitz is at the moment, but here's a few:
PTSGX: Large growth, 30 positions, currently closed
OAKWX: Large blend, world stock, 22 positions
IWIRX: Large Growth, I consider it world stock but M* doesn't, 29 positions
MSCFX: Small blend, 46 positions
ICMAX: Small value, 19 positions
BCSIX: Small growth, 41 positions, currently closed
SCMFX: Mid blend, 35 positions
HFCSX: Mid growth, 27 positions
OAKEX: Mid blend international, 61 positions
AKREX: Mid growth, 44 positions
I'd caution my number of positions is from work I did more than a month ago so some might be slightly out of date. You could also screen on M* for funds with a high percentage of assets in their top 10 holdings. I got 267 distinct domestic or international equity portfolios with more than 50% of assets in the top 10. I also got 772 distinct domestic or international equity portfolios with fewer than 50 holdings.

My only stock holding is AAPL. I bought it right after the split. I have a price point in which I will sell some to get my investment back to original purchase point. This is in a tax deferred account. Any stocks I buy I do perform research.
I have a hunch that Apple will do well in the near future with the new stuff just out plus their plans for NFC and health. I don't have the knowledge of Berkowitz but I limit my stock purchases to 5% of the portfolio each.
As Mark commented earlier, I also have a portion of the portfolio designated as speculative. This is where I invest in funds that are alternative or highly speculative. I won't lose the ranch on this.
Another viewpoint here is that funds with a high profile manager carry added risk in case that manager leaves. Pimco is a perfect example. Berkowitz, Mobius, Gabelli, Gundlach etc all come to mind as examples.
Being retired, I have all the time I need now. When I was working, it might not have worked so well.
Thanks Maurice for the kind words.