Jeffrey Gundlach’s DoubleLine is planning 2 actively managed ETFs. Here are the strategies

Published Tue, Oct 5 202112:05 PM EDTUpdated Tue, Oct 5 20213:54 PM EDT

Bond king Jeffrey Gundlach is eyeing his first exchange-traded funds to capitalize on DoubleLine Capital's winning fixed income and equity strategies. The Los Angeles-based asset manager is planning to launch the DoubleLine Opportunistic Bond ETF and the DoubleLine Shiller CAPE U.S. Equities ETF, according to a filing with the U.S. Securities and Exchange Commission. Both ETFs will be actively managed. Information about tickers and expense ratios was not disclosed in the filing. The funds would be DoubleLine's official entry into the burgeoning ETF market. The fixed-income giant has historically focused on mutual funds and only partnered with State Street Global Advisors to sub-advise SPDR DoubleLine Total Return Tactical ETF (TOTL) and a few others. The combined assets in the U.S. ETF market totaled $6.7 trillion in August, according to the Investment Company Institute , as cost-conscious investors continue to favor the fund that also offers attractive tax efficiency and liquidity. While most of the ETFs are the market are passive, meaning they track their underlying indexes, the DoubleLine's offerings would be actively managed. The filing said the funds would be "semi-transparent," providing a verified intraday indicative value instead of daily disclosure of its portfolio holdings. "Demand for actively managed fixed income ETFs has been climbing in 2021, with their peers like Fidelity, JPMorgan and PIMCO among the beneficiaries," CFRA senior director of ETF and mutual fund research Todd Rosenbluth told CNBC. "As investors become more comfortable using fixed income ETFs, they are seeking to tap into the security selection skills of active managers in an effort to better manage risk and strive for income in a low rate environment." The Opportunistic Bond ETF will invest in a wide variety of fixed-income securities, including government bonds, collateralized debt obligations, corporate obligations and mortgage-backed securities. The fund may invest up to 50% of its net assets in junk bonds and up to 5% in defaulted corporate securities, the filing said. "The bond ETF that they filed for will incur greater credit risk than TOTL in an effort to generate higher income but be managed using the same top-down framework," Rosenbluth said. TOTL is down about 2.2% in 2021. Shiller CAPE U.S. Equities ETF The equity ETF will reference the Shiller Barclays CAPE US Sector TR USD Index, which incorporates the principles of long-term investing distilled by Dr. Robert Shiller through the CAPE ratio, or Cyclically Adjusted Price Earnings ratio, the filing said. The CAPE ratio ass