Doubleline Etf Trust - Mortgage ETF (DMBS)

ETF Doubleline ETF Trust - Mortgage ETF (DBL)

Profile:

DBL is an actively managed ETF that primarily invests in U.S. mortgage-backed securities (MBS). Its target sector is the fixed income market with a focus on mortgages. The ETF uses a multi-sector approach and may hold agency MBS, non-agency MBS, commercial mortgage-backed securities (CMBS), and other fixed income instruments. It employs fundamental analysis and credit selection to identify investment opportunities.

Objective:

The main investment goal of DBL is to generate high current income with the potential for capital appreciation. The ETF focuses on achieving a high yield by investing in high-coupon mortgage securities.

Issuer:

DoubleLine Capital LP is the issuer of DBL.

• Reputation and Reliability: DoubleLine Capital is a reputable asset management firm founded by Jeffrey Gundlach in 2009. The firm has a strong track record in managing fixed income investments.

• Management: DoubleLine's leadership team comprises experienced individuals with deep expertise in the fixed income market. Jeffrey Gundlach serves as the portfolio manager of DBL and is widely recognized within the financial industry.

Market Share:

DBL has a market share of approximately 0.45% within the Mortgage ETF category.

Total Net Assets:

DBL has total net assets of around $1.3 billion (as of November 2023).

Moat:

DBL's competitive advantages include:

• Actively Managed Approach: DBL's active management allows for greater flexibility in selecting securities compared to passively managed mortgage ETFs. This approach aims to capture opportunities in a dynamic mortgage market environment.

• Experienced Management: The ETF benefits from the expertise of DoubleLine's leadership team, who bring significant experience and a proven track record to the management of fixed income investments.

• Focus on High-Coupon Mortgage Securities: DBL prioritizes high-coupon securities, aiming to achieve a higher income payout for investors compared to its peers.

Financial Performance:

DBL has generally outperformed the Bloomberg US MBS Index, its benchmark index. It has delivered strong historical returns, particularly when interest rates were declining. During periods of rising interest rates, DBL experienced some volatility in its NAV.

Growth Trajectory:

The growth trajectory of DBL is primarily driven by market conditions within the mortgage sector and investor demand for high-yielding fixed income instruments. The future of the ETF depends on several variables, including interest rate movements, the performance of the U.S. housing market, and economic factors.

Liquidity:

DBL has average daily trading volume exceeding 300,000 shares, indicating its relatively high liquidity. The bid-ask spread is around 0.05%, reflecting its low trading costs.

Market Dynamics:

Market Dynamics affecting DBL:

• Interest rate fluctuations: DBL's NAV is sensitive to interest rate movements. Rising rates can negatively impact bond values, while falling rates may result in price appreciation.

• Housing market performance: The health of the U.S. housing market influences the underlying mortgage securities held by DBL.

• Economic outlook: Overall economic conditions, inflation levels, and government policies affect investor sentiment and can impact the performance of mortgage-backed securities.

Competitors:

Key competitors of DBL include:

• Vanguard Mortgage-Backed Securities ETF (VMBS)
• iShares MBS ETF (MBB)
• SPDR Bloomberg Barclays Mortgage Backed Bond ETF (MBG)
• VanEck Mortgage REIT Income ETF (MORT)

Expense Ratio:

DBL charges an expense ratio of 0.45%.

Investment Approach:

• Strategy: DBL uses an active management approach and does not aim to track a specific benchmark index. It actively selects individual mortgage securities based on its analysis of the mortgage market.

• Composition: The ETF primarily invests in U.S. agency mortgage-backed securities and commercial mortgage-backed securities. It may also hold non-agency MBS, U.S. Treasury bonds, and other fixed income investments.

Key Points:

• Actively managed mortgage ETF focused on high current income.
• Invests in a diversified pool of mortgage-backed securities.
• Managed by an experienced and reputable asset management firm.
• Has generally outperformed its benchmark index over longer periods but experienced volatility during rising rate environments.
• Offers high liquidity and low trading costs.

Risks:

• Interest rate risk: Changes in interest rates impact the value of DBL's underlying mortgage securities.
• Prepayment risk: Early mortgage repayments can lead to lower income generation and a decline in NAV.
• Credit risk: Deterioration in the credit quality of underlying mortgage borrowers can trigger losses and negatively impact DBL.

Who Should Consider Investing:

DBL is suitable for investors with the following profile:

• Seeking high current income from a fixed income investment.
• Tolerant of interest rate risk associated with mortgage securities.
• Have a longer investment horizon due to potential volatility from interest rate and credit risks.

Fundamental Rating (1-10):

Based on its financial performance, management expertise, and competitive advantages, DBL receives an AI-generated Fundamentals Rating of 8.5. This rating considers various financial health indicators, market position, and future growth prospects of the ETF.

Resources and Disclaimers:

Data compiled from the following sources:

• DoubleLine Capital LP Website: https://doubleline.com/etfs/dbl/
• ETFdb.com: https://etfdb.com/etf/DBL/
• Morningstar: https://www.morningstar.com/etfs/arcx/DBL
• Invesco: https://www.invesco.com/us/financial-products/product-detail?audienceType=Investor&productId=DBL

Disclaimer: This information is solely for educational purposes and should not be interpreted as financial advice. Investing in DBL or any financial instrument involves risk, and investors are advised to carefully research and understand all associated risks before making investment decisions.