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“Through individual security selection across credit markets, we aim to build a portfolio that provides attractive yields and income with potentially lower volatility than one composed solely of high yield corporates,” Cohen said.
Cohen and Shinoda see the fund in various investment roles, including as an alternative to equities given stretched stock valuations or as a complement to core fixed income holdings. The ETF focuses on targeting securities that generate high current income through active asset allocation among various fixed income sectors and security selection within the selected sectors.
These sectors could include corporate debt securities, bank loans, RMBS, commercial mortgage-backed securities, asset-backed securities and collateralized loan obligations. Fund managers expect to invest significantly in one or more sectors and may at times invest mostly in a single sector. DoubleLine also said the ETF may invest in securities of any credit quality, including those rated below investment grade.