DoubleLine Low Duration Emerging Markets Fixed Income Fund Marks 10-Year Track Record

TAMPA, Fla., July 22, 2024 /PRNewswire/ -- The DoubleLine Low Duration Emerging Markets Fixed Income Fund (or "the Fund") recently marked its first decade of active investment management. The mutual fund is distributed via I-share (DBLLX) and N-share (DELNX) classes.

The Fund seeks to construct an investment portfolio in emerging markets sovereign, quasi-sovereign and private (non-government) fixed income securities with a U.S. dollar-weighted average effective duration of three years or less. (As of June 30, 2024, the Fund had a duration of 2.03 years.) The Fund employs a value-seeking investment approach using bottom-up research linking credit fundamentals, market valuations and portfolio strategy. Securities held in the Fund portfolio are dollar-denominated.

The Fund is managed by a 15-member investment team of portfolio managers, analysts and traders devoted to emerging markets debt led by Portfolio Managers Luz Padilla, Director of International Fixed Income at DoubleLine; Mark Christensen; and Su Fei Koo.

Ten-Year Total Return

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance current to the most recent month-end may be obtained by calling (213) 633-8200 or by visiting www.doubleline.com.

For the 10 years ended June 30, 2024, the Fund I shares (DBLLX) delivered an annualized total return of 2.46%, versus 3.13% for its benchmark, the J.P. Morgan CEMBI Broad Diversified Maturity 1-3 Year Index, and 1.34% for the Bloomberg U.S. Aggregate 1-3 Years Index (or the "Aggregate 1-3 Years"). DoubleLine plans to add the Aggregate 1-3 Years as a second benchmark in the Fund's prospectus, effective July 26, 2024. It is not possible to invest directly in an index. For standardized performance, including quarter-end returns, please visit this page.

The Adviser has contractually agreed to waive fees and reimburse expenses through August 1, 2024.

Risk-Adjusted Return

For the same 10-year period, the Fund's I-share class delivered a Sharpe ratio of 0.26 versus 0.39 for the J.P. Morgan CEMBI Broad Diversified Maturity 1-3 Year Index and negative 0.13 for the Bloomberg U.S. Aggregate 1-3 Years Index. The Sharpe ratio is a measure of the excess return per unit of risk (as measured by volatility) for an investment asset or a portfolio. A higher Sharpe ratio indicates better risk-adjusted performance than a lower Sharpe ratio.

Fund History and Roles

Portfolio Managers Luz Padilla, Mark Christensen and Su Fei Koo have worked together for 29 years, investing in emerging markets credit. Their 15-member team provides active investment strategies to bring the improving-credit story of emerging markets debt to investors and their advisers. The DoubleLine Low Duration Emerging Markets Fixed Income Fund was launched April 7, 2014, after Ms. Padilla took note of the performance of the emerging markets sleeve of the multisector portfolio of a DoubleLine low-duration strategy, including during the "taper tantrum," a surge in interest rates in 2014 on fears of quantitative tightening and rate hikes by the Federal Reserve.

In addition to implementing the Fund's low-duration mandate and all-dollar-denominated portfolio holdings, the investment team has managed the portfolio with a higher percentage of securities rated investment grade (IG) than in the J.P. Morgan CEMBI Broad Diversified Maturity 1-3 Year Index.

The reduced allocation to below-IG bonds, Ms. Padilla said, has meant giving up some of the yield available in emerging markets debt in exchange for a portfolio of higher credit quality. "We designed the investment strategy and actively manage the fund," she said, "to give investors access to the asset class with less volatility due to increases in U.S. Treasury yields, emerging markets credit spreads or both."

From the Fund's April 7, 2014, inception, through June 30, 2024, securities rated investment grade have comprised on average 77.1% of the portfolio's holdings, including cash, vs. an average IG composition of 61.3% for the J.P. Morgan CEMBI Broad Diversified Maturity 1-3 Year Index.  

DoubleLine President Ron Redell sees two possible roles for the Fund. "On one hand, the Fund is worthy of consideration by those who regard EM fixed income as an asset class offering diversification benefits and undergoing a secular evolution of improving credit quality, but they seek their exposure actively managed to lower duration and with bottom-up credit underwriting. On the other hand, the Fund might appeal to other investors who are seeking the potential for a yield pickup in their short-duration allocations."

Definitions

Bloomberg U.S. Aggregate 1-3 Years Index. This index tracks the one- to three-year component of the Bloomberg US Aggregate Bond Index, which represents securities that are SEC registered, taxable and dollar denominated in the U.S. investment grade, fixed-rate bond market.

J.P. Morgan CEMBI Broad Diversified Maturity 1-3 Year Index. This index tracks corporate bonds with a maturity of one to three years and includes smaller issues and a wider array of bonds than the CEMBI, which is a market capitalization-weighted index consisting of U.S. dollar-denominated corporate bonds from emerging markets. The CEMBI is a liquid global corporate benchmark representing Asia, Latin America, Europe and the Middle East/Africa.

Maximum Drawdown. The maximum peak-to-trough decline during a specific period for an investment, trading account or fund. A drawdown is usually quoted as the percentage between the peak and the subsequent trough.

Sharpe Ratio. This metric is used to help investors understand the return of an investment compared to its risk. The ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk. Volatility is a measure of the price fluctuations of an asset or portfolio. Subtracting the risk-free rate from the mean return allows an investor to better isolate the profits associated with risk-taking activities. The risk-free rate of return is the return on an investment with zero risk, meaning it's the return investors could expect for taking no risk. The yield for a U.S. Treasury bond, for example, could be used as the risk-free rate.

Standard Deviation. Measure of the variation or dispersion of a set of data from its mean or expected/budgeted value. A low standard deviation indicates that the data points tend to be very close to the mean, whereas a high standard deviation indicates that the data is spread out over a large range of values. A measure of an investment's volatility.

About DoubleLine Capital LP

DoubleLine Capital is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine's offices can be reached by telephone at (813) 791-7333 or by email at [email protected]. Media can reach DoubleLine by email at [email protected]. DoubleLine® is a registered trademark of DoubleLine Capital LP.

The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contain this and other important information about the investment company, and may be obtained by calling (877) 354-6311 / (877) DLINE11, or visiting www.doubleline.com. Read them carefully before investing.

Risk Disclosure

Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated 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. 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 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.

While the Fund is no-load, management fees and other expenses still apply. Please refer to the prospectus for further details.

DoubleLine Funds are distributed by Quasar Distributors, LLC. DoubleLine® is a registered trademark of DoubleLine Capital LP.

© 2024 DoubleLine Capital LP

SOURCE DoubleLine