Long Duration Total Return Bond Fund
Investment Objective
The Fund’s investment objective is to seek long-term total return.
Philosophy
Liability Driven Investing (“LDI”) or Macro Hedging Strategies (“MHA”) take a relative value approach to investing through long duration securities which traditionally have included U.S. Treasuries and corporate bonds. DoubleLine believes long duration Mortgage-Backed Securities (MBS) have distinct advantages over other long duration options because of the attractive valuations based on mispricings and lower volatility.
We think Collateralized Mortgage Obligations (CMO) are an appropriate choice for this type of investment. CMOs pool together and pay out cash flows from underlying mortgages in accordance with payment priority rules, where both interest and principal could be subject to various orderings. In the case of longer duration bonds, principal payment is usually delayed until certain days in the future, thereby reducing prepayment uncertainty with respect to return of principal. Therefore, targeted principal return windows can be created and are appropriate choices for both LDI and MHA.
Fund Facts
Retail and Institutional Class
| Retail N-share | Inst. I-share | |
| Ticker | DLLDX | DBLDX |
| Min Investment | $2,000 | $100,000 |
| Min IRA Investment | $500 | $5,000 |
| Gross Expense Ratio | 0.95% | 0.70% |
| Net Expense Ratio* | 0.90% | 0.65% |
| Benchmark | Bloomberg Barclays U.S. Long Government/Credit Index | |
| Fund Inception Date | 12/15/2014 | |
*The advisor has contractually agreed to waive fees and reimburse expenses through July 31, 2019.
Investment Description
The Fund seeks long-term total return for investors that are looking to add duration to their portfolio. Investors looking to add duration have historically concentrated on the Corporate and Government sectors of the fixed income market. DoubleLine believes instead that by investing in segments of the mortgage-backed securities market (MBS) that we can potentially diversify risk and enhance returns.
