The Doubleline funds get quite a bit of commentary here and for good reasons. Among the several funds in the stable, these two appear to be top choices for a core holding.
I had to make a change on the fixed income side of the portfolio and these two funds ended up as the finalists. I went with DLFNX mainly due to the smaller AUM. Both seemed to be very similar with only small differences in allocations.
Does anyone here consider the AUM of Total Return Bond to be too large? Pimco's Total Bond is in the same position even with the recent outflows. Since I have already made the switch this is a moot question but one that might spur some discussion. How big does the AUM of a bond fund have to be before it hinders performance? Does the large AUM have the same effect on a bond fund as it would on a equity fund?
DLFNX will be one of three funds that I will consider as core holdings on the bond side of things.
Comments
DLFNX
Cash 9.1%
Government 17.7%
Mortgage-Backed Securities 29.6%
Emerging Markets 13.4%
Investment Grade Corporate 10.2%
Commercial Mortgage-Backed Securities 6.6%
Bank Loans 5.0%
High Yield Corporate 4.5%
Collateralized Loan Obligations 3.9%
Total 100.0%
DLTNX
Cash 12.1%
Treasury 5.1%
Agency Passthroughs 24.1%
Agency CMO 21.3%
Non Agency Residential MBS 25.5%
Commercial MBS 6.4%
Collateralized Loan Obligations 4.8%
Other 0.6%
Total 100.0%
"As the fund objective indicates, this fund is suitable for Liability Driven Investing(“LDI”) or Macro Hedging Strategies(“MHA”).
...So, not intended to be a core holding. I gather that much...
http://www.doublelinefunds.com/pdf/DLLDX_Fact_Sheet.pdf
The ratings for DLFNX are lower than for DLTNX. That must be behind as it looks like DLFNX beat the other slightly last year. AUM for DLTNX is around $40 billion, while DLFNX has around $3 billion.
Thanks @mrc70 for that breakdown as well. As @Crash noted, DLFNX seems to be more spread out asset wise. It should be said that these funds are changing all the time. M* (with grains of salt) shows a somewhat different allocation as of 12.30.2014. Both have increased their cash allocation.
M* lists both as Intermediate Bond. Lipper categorizes DLTNX as a Mortgage Bond fund while DLFNX is listed as Core Plus Bond.
Thanks to both of you for your comments.
Liability Driven Investment - LDI
DEFINITION OF 'LIABILITY DRIVEN INVESTMENT - LDI'
A form of investing in which the main goal is to gain sufficient assets to meet all liabilities, both current and future. This form of investing is most prominent with defined-benefit pension plans, whose liabilities can often reach into the billions of dollars for the largest of plans.
http://www.investopedia.com/terms/l/ldi.asp
Linked chart for DLFNX vs DLTNX
Linked chart for for DLFNX vs DLTNX vs PONDX
In both cases with these charts, this is an active site link. Being that you may add and/or remove the tickers for your own comparative use. Save the site/chart link for future use for any compares. ALSO NOTE, that these charts do include "total returns" inclusive of dividends, cap. gains, etc.
ALSO, left click at the left edge of the 200 day slider (default setting) and drag the slider to the left for about a 1150 business day view. NOTE the "temper tantrum" period that came into place in May of 2013 when the Fed stated that they were going to remove some of the easy money. One may also view any 200 day period (not available for very new funds, stocks) with holding a left click onto the 200 day slider and dragging the slider to the left for earlier periods. The slider can be reduced to about 2 days and to much earlier start dates, depending upon the age of what is being viewed.
We looked at DoubleLine when they were first born, but maintained our PONDX holding, which later evolved into a PIMIX holding.
Active management is going to cause any of these "multi-sector" funds to travel different paths, yes?
An alternative for the "build your own" would be to hold equal amounts of about 5 or 6 etfs in bond areas of your choice.
Take care,
Catch
Chart for DLFNX set for 50, 100 & 200 days, over a 3 year period, RSI (relative strength) at 14.
Chart for DLFNX set for 10 & 39 days, over 1 year period, RSI at 14, smooth moving average.
There are numerous other setting one may fiddle with below the chart in 3 different areas. Also, just to the right of the ticker symbol; these charts are set for weekly price movements. This may be changed to daily. An "inspect" box may be checked to allow some other functions with the cursor over the graph.
I have only studied a few of the features available at this site. Wish I had more time in the day.
Take care,
Catch
Yes, PDI has been a most decent performer. I suppose the dip in mid-2013 scared a few folks away for awhile.
Thank you for the note about this.
Take care,
Catch
http://www.doublelinefunds.com/pdf/DoubleLine_Core_Fixed_Income_White_Paper_May_2011.pdf