DoubleLine Asset-Backed Securities ETF (DABS) seeks to provide current income and capital appreciation by investing primarily in asset-backed securities (ABS), which are bonds backed by pools of consumer loans, credit card receivables, auto loans, and other non-mortgage debt obligations.
How It Works
DABS employs an actively managed approach led by DoubleLine's experienced fixed income team, utilizing fundamental credit analysis to select asset-backed securities across the credit spectrum. The fund may invest in both investment-grade and below-investment-grade ABS, with portfolio managers adjusting duration, credit quality, and sector allocation based on market conditions. Holdings typically range from 50-150 securities with active rebalancing as opportunities arise.
Key Features
- Managed by DoubleLine Capital, a respected fixed income specialist with over $100 billion in assets under management
- Focuses on asset-backed securities niche that many broad bond ETFs underweight or exclude entirely
- Zero expense ratio at launch provides significant cost advantage over typical actively managed bond funds charging 0.50-1.00%
Risks
- This ETF can lose value if consumer loan defaults spike during economic downturns, as underlying ABS bonds depend on borrower payment performance
- Credit risk exposure means below-investment-grade holdings could face significant price declines if credit conditions deteriorate rapidly
- Interest rate sensitivity means bond prices typically fall when rates rise, though ABS duration risk is generally lower than Treasury bonds
Who Should Own This
Best suited as a satellite holding (5-15% of fixed income allocation) for income-focused investors with 2-5 year time horizons seeking higher yields than Treasury bonds. Medium risk tolerance required due to credit exposure. Appropriate for investors wanting professional active management in specialized ABS sector.