DoubleLine's Fixed Income Asset Allocation (FIAA) process blends active management of asset class exposure with bottom-up security selection.
FIAA decisions are made by committee, led by Jeffrey Gundlach during the monthly meetings of DoubleLine’s FIAA Committee which includes senior portfolio managers from each asset class.
DoubleLine raises or lowers asset weightings based on its analysis of sector fundamentals and relative valuation.
Specialized portfolio managers for each asset class incorporate their deep experience and research to select individual securities within their respective sectors.
The FIAA Investment Process
The FIAA Committee meets monthly to discuss financial markets, portfolio performance, and sector outlooks. FIAA adjusts sector allocations across strategies including duration positioning and overall credit quality. These changes are then implemented by each trading desk through asset sales and/or purchase of new investments. A consistent, proven approach that combines top-down sector allocation with bottom-up security selection forms a cornerstone of the investment process.
Investment Outlook - Each meeting begins with a macroeconomic and market overview that includes a discussion on macroeconomic indicators that include inflation, employment, income, Purchasing Managers' Index (PMI), and housing metrics, as well as market data on interest rates, spreads, foreign exchange and commodities. This overview helps to inform the FIAA Committee’s investment outlook for the next 18 to 24 months.
Portfolio Positioning - In addition to the review of the global landscape, each portfolio manager assesses their respective sector's outlook and relative attractiveness to other asset classes. These discussions are paramount to the FIAA Committee’s determination of the most appropriate sector positioning, duration management and credit exposure for the fund given the current environment.
Subsector Implementation - Sector allocation changes occur gradually, using a long-term approach, based on analysis of sector fundamentals and relative valuation. Top-down allocation decisions are coupled with bottom-up security selection as sector portfolio managers and their teams are tasked with the implementation. Each sector team draws upon a vast knowledge of their asset class to execute the committee’s decisions by performing fundamental research, assessing the relative value within their sector and, ultimately, selecting securities.
