DoubleLine Shiller CAPE US Equities ETF (DCPE)

ETF DoubleLine Shiller CAPE US Equities ETF (CAPE): Overview

Profile:

The ETF DoubleLine Shiller CAPE US Equities ETF (CAPE) tracks the performance of the CAPE US Total Market Index, which is designed to reflect the performance of the broad U.S. equity market, as measured by Robert Shiller's cyclically adjusted price-to-earnings (CAPE) ratio. The ETF invests in large-cap and mid-cap U.S. stocks with low CAPE ratios. This means CAPE seeks to buy stocks trading at lower-than-average historical prices, potentially offering value to investors.

Objective:

CAPE's primary goal is to achieve long-term capital appreciation by investing in undervalued U.S. equities, with a focus on companies with strong fundamentals and low price-to-earnings ratios.

Issuer:

DoubleLine Capital

• Reputation and Reliability: Founded in 2009 by Jeffrey Gundlach, DoubleLine Capital is a reputable asset management firm with over $150 billion in assets under management. Gundlach is a highly respected investor with a strong track record, previously managing the highly successful TCW Total Return Bond Fund.
• Management: DoubleLine's investment team consists of experienced professionals with diverse backgrounds and expertise in various investment areas.

Market Share:

CAPE holds a market share of approximately 0.1% within the US Equity ETF sector, placing it among the smaller funds in this category.

Total Net Assets:

CAPE currently has approximately $2.2 billion in total net assets under management.

Moat:

• Unique Investment Strategy: CAPE's focus on undervalued stocks and utilization of the CAPE ratio offers a distinct approach compared to traditional market-cap-weighted index funds.
• Experienced Management Team: DoubleLine's management team, led by Jeffrey Gundlach, brings significant experience and knowledge to the ETF's portfolio construction and management.

Financial Performance:

CAPE has a relatively short track record since its inception in 2015. It has delivered positive returns but has underperformed the broader market as represented by the S&P 500 over the past three years.

Benchmark Comparison:

Compared to the S&P 500, CAPE has exhibited lower volatility but also generated lower returns. This aligns with its value-oriented strategy, aiming for consistent growth with potentially lower risk.

Growth Trajectory:

CAPE has experienced moderate growth in assets under management since its launch, indicating growing investor interest in its value investing approach.

Liquidity:

CAPE has an average daily trading volume of approximately 25,000 shares, ensuring sufficient liquidity for investors to buy and sell shares easily.

Market Dynamics:

Market factors like interest rates, economic growth, and investor sentiment can significantly influence value investing strategies like CAPE's.

Competitors:

• iShares S&P 500 Value ETF (IVE)
• Vanguard Value ETF (VTV)
• SPDR S&P 500 Value ETF (SPYV)

Expense Ratio:

The ETF's expense ratio is 0.35%, which is considered average compared to similar value-focused ETFs.

Investment Approach and Strategy:

• Strategy: CAPE passively tracks the CAPE US Total Market Index, seeking long-term capital appreciation through exposure to undervalued U.S. equities.
• Composition: The ETF invests primarily in large- and mid-cap US stocks with low CAPE ratios, focusing on sectors like financials, technology, and healthcare.

Key Points:

• Value-oriented investment strategy with a focus on undervalued stocks
• Experienced management team led by Jeffrey Gundlach
• Moderate growth trajectory and sufficient liquidity
• Competitive expense ratio compared to similar ETFs

Risks:

• Volatility: While lower than the broader market, CAPE can experience fluctuations due to changes in market sentiment and economic conditions.
• Market Risk: CAPE's performance is highly dependent on the performance of the underlying value stocks it holds, which can be more volatile than the overall market.
• Value Investing Risk: Value investing strategies may underperform during periods of market rallies favoring growth stocks.

Who Should Consider Investing:

• Investors with a long-term investment horizon
• Investors seeking value-oriented exposure to the U.S. equity market
• Investors comfortable with moderate volatility

Fundamental Rating Based on AI:

7/10

While CAPE exhibits a unique value-oriented approach and experienced management, its relatively short track record and underperformance compared to broader market benchmarks limit its overall rating. However, its focus on undervalued stocks and potential for consistent growth make it a compelling option for specific investor profiles.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 10, 2023.

• DoubleLine Capital website: https://doubleline.com/etfs/cape/
• ETF Database: https://etfdb.com/etf/CAPE/
• Morningstar: https://www.morningstar.com/etfs/arcx/cape/quote

Disclaimer: This information should not be considered financial advice. It is essential to conduct your own research and due diligence before making any investment decisions.