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Rating:Rock Star Gundlach Defies the Odds Not Rated 5.0 Email Routing List Email & Route  Print Print
Tuesday, July 05, 2016

Rock Star Gundlach Defies the Odds

News summary by MFWire's editors

Jeffrey Gundlach's SPDR DoubleLine Total Return Tactical ETF was the focus of a recent segment hosted by Bloomberg Intelligence's Eric Balchunas and Julie Hyman.

Gundlach's actively managed ETF has ballooned from $600 million a year ago to $2.5 billion most recently, which is remarkable under pretty much any circumstances. But inflows continue despite the fund's slight underperformance and at a time when actively managed assets have been flocking away from actively managed funds and toward passive funds. DoubleLine Capital's [profile] ETF has been bucking that trend.

Gundlach is cheered for overcoming two major obstacles:

  • Underperformance

  • A"sea change" from active to passive management

The rise in assets has been about Gundlach's fame. "No mater what you say about active, if you're a rock star, it trumps everything," states Balchunas, adding that Gundlach is the last of dying breed (unless Warren Buffett decides to launch an actively managed ETF.)

Fees on the DoubleLine ETF are 55 basis points, which is more pricey than institutional fees but less expensive than the retail class.

Something that could reverse the trend of outflows from actively managed ETFs is a series of lower cost funds, which happen to be on the horizon. Vanguard has begun the process to launch a pair of ETFs in Canada and London with fees of 22 basis points and 35 basis points, respectively, both of which are below the industry standard.


Edited by: Gerelyn Terzo

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