DoubleLine Capital LP’s next pair of exchange-traded funds are setting sail into a rocky real estate market.
The DoubleLine Commercial Real Estate ETF (ticker DCMB) and the DoubleLine Mortgage ETF (DMBS) launched Tuesday, according to a press release. DCMB invests in investment-grade commercial mortgage-backed securities, while DMBS — whose management team includes DoubleLine founder Jeffrey Gundlach — holds high-quality residential mortgage-backed securities.
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The new funds land at a potentially perilous time. The outlook for commercial real estate has darkened as remote work boosts office vacancies and higher borrowing costs loom for those looking to refinance in the coming year. Meanwhile, though still sitting on gains for the year, MBS underperformed long-dated Treasuries over the past month amid the banking sector turmoil that erupted with the collapse of Silicon Valley Bank and Signature Bank early last month.
But that turbulence creates a potential opening for DoubleLine: Launching into a volatile market can provide a vehicle for investors looking to ride the rebound, according to Bloomberg Intelligence.
“While most ETFs tend to get launched after a run-up in the strategy or asset class, it can be actually be better to launch after a rough patch as it gives the ETF room to run down the road,” said Bloomberg Intelligence senior ETF analyst Eric Balchunas. “These should have success given how much advisors look for active management in fixed income — especially from a brand name for a relatively low fee.”
Read the full article here by Katie Greifeld, Advisor Perspectives.
