MAG – Commodities redirect page
You are now leaving DoubleLine Funds and entering the CityWire Interview page.
To view the Interview, please click HERE
In an interview with Citywire, DoubleLine portfolio manager Jeff Mayberry, explains the risks and rewards of commodities and why a peak is some way off.
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Opinions expressed are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Fund invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund may use leverage which may cause the effect of an increase or decrease in the value of the portfolio securities to be magnified and the Fund to be more volatile than if leverage was not used. Derivatives involve special risks including correlation, counterparty, liquidity, operational, accounting and tax risks. These risks, in certain cases, may be greater than the risks presented by more traditional investments. Investing in ETFs and ETNs involve additional risks such as the market price of the shares may trade at a discount to its net asset value (“NAV”), an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a Funds ability to sell its shares. The fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Investments in commodities or commodity-related instruments may subject the Fund to greater risks and volatility as commodity prices may be influenced by a variety of factors including unfavorable weather, environmental factors, and changes in government regulations. Any index used by the Fund may not be widely used and information regarding its components and/or its methodology may not generally be known to industry participants, it may be more difficult for the Fund to find willing counterparties to engage in total or excess return swaps or other derivative instruments based on the return of the index. The Fund is non-diversified meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund.
- Broad commodities have shown low correlations to other broad asset classes
- The average correlation is 0.17
Source: DoubleLine, Bloomberg. Calculations using monthly data and excess return indices. Sectors are represented by the following indices:
Commodities: Bloomberg Commodity Index (BCOM) – An index calculated on an excess return basis that reflects commodity futures price movements. The index rebalances annually weighted 2/3 by trading volume and 1/3 by world production and weight-caps are applied at the commodity, sector and group level for diversification. Roll period typically occurs from 6th-10th business day based on the roll schedule.
U.S. Large Cap: S&P 500® – The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States.
U.S. Small Cap: Russell 2000 Index – A subset of the Russell 3000 Index representing approximately 10% of the total market capitalization and measuring the performance of the small-cap segment of the U.S. equity universe.
Fixed Income: Barclays Capital U.S. Aggregate Index – An index that represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis.
One cannot invest directly in an index.
CAPE (Cyclically Adjusted Price-to-Earnings) Ratio – A measure of the price of a company’s stock relative to average earnings growth over the past 10 years.
Drawdown – is the peak-to-trough decline during a specific recorded period of an investment, fund or commodity security.
Price-to-Earnings Ratio (P/E) – The valuation ratio of a company’s market value per share divided by the company’s earnings per share (EPS).
Diversification does not assure a profit, nor does it protect against a loss in a declining market.