State Street Corp. and Jeffrey Gundlach's DoubleLine Capital have teamed to open their first actively managed bond exchange-traded fund to compete with Bill Gross' Pimco Total Return ETF (BOND).
SPDR DoubleLine Total Return Tactical ETF will invest in fixed-income securities and be run by Mr. Gundlach and Philip Barach, State Street said last Friday in a filing with the Securities and Exchange Commission. The fund, if approved, would list on the NYSE Arca exchange.
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Mr. Gross' Pacific Investment Management Co. has led the industry in developing actively managed bond ETFs, offering eight funds with $7.9 billion in assets, or about 61% of the market. The new offering from State Street would be the first ETF for DoubleLine, which manages about $49 billion in assets through mainly mutual funds and closed-end funds.
“We've always been open to the idea of ETFs,” said Ronald Redell, president of DoubleLine Funds Trust. “State Street is the best in class among ETF providers.” Mr. Redell declined to comment on the fund's strategy, citing regulatory restrictions.
The SPDR DoubleLine ETF will invest as much as 25% in corporate and sovereign high-yield debt, up to 15% in foreign-currency securities and a maximum of 25% in emerging markets, according to the filing.
(Bloomberg News)