DoubleLine Converts Securitized Credit Fund to ETF

Event summary

  • DoubleLine has converted its DoubleLine Securitized Credit Fund (formerly ticker DBLIX) into an exchange-traded fund (ETF) named DSCO, trading on the NYSE Arca exchange.
  • The fund, managed by Morris Chen, Andrew Hsu, and Ken Shinoda, focuses on asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), non-Agency RMBS, and CLOs.
  • DSCO was originally launched as a mutual fund in September 2019 and has a 3- and 5-year track record.
  • The fund's management fee is 49 basis points, with total annual operating expenses of 0.50%.

The big picture

DoubleLine's conversion of its securitized credit fund to an ETF reflects a broader trend among asset managers to offer investment strategies in various formats to cater to diverse investor preferences. This shift allows for greater transparency and potentially improved liquidity, but also introduces new operational considerations. The fund's focus on securitized credit, particularly in a low-yield environment, suggests a bet on active management and credit selection to generate returns.

What we're watching

Investor Adoption
The success of DSCO will depend on attracting new investors who prefer the ETF structure, potentially drawing assets away from similar mutual funds.
Performance Parity
Continued monitoring of DSCO's performance relative to its benchmark, the Bloomberg US Aggregate Bond Index, will be crucial to assess the impact of the ETF structure.
Competitive Landscape
The move signals increased competition within the securitized credit ETF space, and DoubleLine's ability to differentiate its strategy will be key to maintaining market share.

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