Written by David Fabian, November 06th, 2017
One of the closed-end funds that seems to be a recurrent favorite on our watch list is the DoubleLine Opportunistic Credit Fund (DBL), run by Jeffrey Gundlach of DoubleLine Capital. This unique actively managed portfolio was the first of its kind to debut from DoubleLine back in 2012 and has developed a cult following among CEF investors.
DBL primarily invests in a mixed basket of mortgage backed securities, collateralized loan obligations and other asset backed securities. The fund has just over $325 million in total assets with a relatively tame 16% leverage ratio to boost its net exposure. It currently yields over 8% annually and income is paid monthly to shareholders. Read more
Written by David Fabian, December 03rd, 2016
Real estate stocks have taken a beating in recent months as rising interest rates derail the momentum of this beloved income sector. Yet despite the dip in traditional housing and commercial REITs, one high yield segment of the market is still seeing surging prices.
Mortgage REITs (or mREITs) have largely ignored the trend in Treasury bonds and instead focused on the continued strength in overall credit conditions. This has translated into new all-time highs for the small group of exchange-traded funds that track these investments. Read more
Written by David Fabian, May 17th, 2016
The allure of high yields is something that income investors are always tempted to chase. When you couple an outsized dividend payout with an explosion of momentum, the attraction can become even further exacerbated. This is exactly what happened earlier this month when Jeffrey Gundlach offered a recommendation for investors to purchase the iShares Mortgage Real Estate Capped ETF (REM) and simultaneously short the Utility Select Sector SPDR (XLU).
Since that call, REM has only experienced a single minimal down day among nine trading sessions and daily volume has exploded in kind. The chart below shows how much Gundlach’s recommendations carry weight throughout the income-focused investment community.
Written by Michael Fabian, June 20th, 2014
Scanning the universe of closed end funds, its becomes easy to identify why some strategies have outperformed others in their individual peer groups. These unique and sometimes esoteric approaches offer investors the opportunity for alpha over traditional ETFs or even other mundane CEFs. Furthermore, we painstakingly attempt to build our watch list from these types of intriguing strategies, and at times like these, pursue them when discount arbitrage opportunities are few and far between. Read more
Written by David Fabian, March 10th, 2014
It’s been a while since I addressed the topics of interest rates, tapering, and the impact of these concepts on our investment portfolios. Last week’s better than expected jobs report significantly lifted both intermediate and long-term interest rates which gave us a flash back to 2013 as the markets digested the news. Ultimately the increase in jobs is seen as a positive sign the economy is on track and underscores the Fed’s intent to taper their monthly asset purchase programs by $10 billion per month until the stimulus is completely removed. Read more