Summary: The DoubleLine Emerging Markets Fixed Income Fund’s performance is less than stellar. This is especially true when compared to the other funds in the DoubleLine family who are all crushing their benchmarks. However we are not counting the fund out yet.
Commentary: While the fund’s performance has been disappointing up to this point there are some good reasons to remain hopeful. Before joining DoubleLine in 2009, the fund’s lead portfolio manager Luz Padilla managed the TCW Emerging Markets fund. Under her direction that fund was one of the top performing Emerging Market funds around.
We recently sat in on a call with Ms. Padilla, who made a compelling case for emerging market bonds. To sum it up, emerging markets have come into their own since the financial crisis. As the developed markets continue to increase their debt levels, and remain mired in slow or negative growth, emerging market governments are keeping debt levels relatively low, and are reaping the benefits. You can read more about this here.
Short-Term Performance: Ok Since its inception in 2010, the fund is up 9.83% per year on average. This trails its benchmark index which has returned 11.73% per year on average over that same time period.
Long-Term Performance: Special The DoubleLine Emerging Markets Fixed Income Fund has no long-term track record. However, Luz Padilla, the fund’s lead portfolio manager and two other primary participants on the fund’s management team have been together for 14 years. During that time they also ran the TCW Emerging Markets Fund, with very good results.
Returns relative to risk: Good While the fund has underperformed its benchmark, it has done so by taking significantly less credit and interest rate risk. Currently 82% of the fund’s assets are rated investment grade, which compares to 62% for the benchmark. The fund’s duration is also significantly shorter at around 4 years, compared to the benchmark at over 7 years. You can learn more about duration here.
Fees: Good No sales load and a 1.21% expense ratio. If you have $100k to invest, you can buy the institutional shares, which have an expense ratio of 0.96%. You can learn more about bond mutual fund fees here.
Manager Tenure: Special DoubleLine was founded in 2009 and the fund’s lead portfolio manager Luz Padilla joined the company shortly thereafter. However before joining DoubleLine she was the lead portfolio manager on the TCW Emerging Markets Fund.