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DoubleLine
Funds
Prospectus
|
Share
Classes | ||||||||||||||
Fixed
Income
|
I
|
N
|
R6
|
|||||||||||
DoubleLine Total Return Bond Fund | DBLTX | DLTNX | DDTRX | |||||||||||
DoubleLine Core Fixed Income Fund | DBLFX | DLFNX | DDCFX | |||||||||||
DoubleLine Emerging Markets Fixed Income Fund | DBLEX | DLENX | — | |||||||||||
DoubleLine Low Duration Bond Fund | DBLSX | DLSNX | DDLDX | |||||||||||
DoubleLine Floating Rate Fund | DBFRX | DLFRX | — | |||||||||||
DoubleLine Flexible Income Fund | DFLEX | DLINX | DFFLX | |||||||||||
DoubleLine
Low Duration Emerging Markets Fixed Income Fund |
DBLLX | DELNX | — | |||||||||||
DoubleLine Long Duration Total Return Bond Fund | DBLDX | DLLDX | — | |||||||||||
DoubleLine Global Bond Fund | DBLGX | DLGBX | — | |||||||||||
DoubleLine Infrastructure Income Fund | BILDX | BILTX | — | |||||||||||
DoubleLine Income Fund | DBLIX | DBLNX | — | |||||||||||
DoubleLine
Emerging Markets Local Currency Bond Fund |
DBELX | DLELX | — | |||||||||||
Global Asset Allocation | ||||||||||||||
DoubleLine Multi-Asset Trend Fund | DBMOX | DLMOX | — | |||||||||||
Non-Traditional | ||||||||||||||
DoubleLine Strategic Commodity Fund | DBCMX | DLCMX | — | |||||||||||
Equities | ||||||||||||||
DoubleLine Shiller Enhanced CAPE® | DSEEX | DSENX | DDCPX | |||||||||||
DoubleLine Shiller Enhanced International CAPE® | DSEUX | DLEUX | — |
Please
read this document carefully before investing, and keep it for future
reference.
Neither
the Securities and Exchange Commission, the Commodity Futures Trading
Commission, nor any state securities commission has approved or
disapproved these securities or determined if this Prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense. |
Share Class | Class I | Class N | Class R6 | |||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) | ||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the original purchase price) | ||||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||||
Redemption Fee (as a percentage of shares redeemed within 90 days of purchase) | ||||||
Fee for Redemption by Wire | $ |
$ |
$ | |||
Exchange Fee | ||||||
Account Fee |
Share Class | Class I | Class N | Class R6 | |||
Management Fees | ||||||
Distribution and/or Service (12b‑1) Fees | ||||||
Other Expenses (includes sub‑transfer agent accounting or administrative services expenses) | ||||||
Total Annual Fund Operating Expenses |
Class I | Class N | Class R6 | ||||
1 Year | $ |
$ |
$ | |||
3 Years | $ |
$ |
$ | |||
5 Years | $ |
$ |
$ | |||
10 Years | $ |
$ |
$ |
• |
active
management risk: the risk that the Fund will fail to meet
its investment objective and that the Fund’s investment performance will
depend, at least in part, on how its assets are allocated and reallocated
among asset classes, sectors, underlying funds and/or investments and that
such allocation will focus on asset classes, sectors, underlying funds,
and/or investments that perform poorly or underperform other asset
classes, sectors, underlying funds, and/or available investments. Any
given investment strategy may fail to produce the intended results, and
the Fund’s portfolio may underperform other comparable funds because of
portfolio management decisions related to, among other things, the
selection of investments, portfolio construction, risk assessments, and/or
the outlook on market trends and
opportunities. |
• |
asset-backed
securities investment risk: the risk that borrowers may
default on the obligations that underlie the asset-backed security and
that, during periods of falling interest rates, asset-backed securities
may be called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate, and the risk that
the impairment of the value of the collateral underlying a security in
which the Fund invests (due, for example, to non‑payment of loans) will
result in a reduction in the value of the
security. |
• |
counterparty
risk: the risk that the Fund will be subject to credit risk
with respect to the counterparties to the derivative contracts and other
instruments entered into by the Fund; that the Fund’s counterparty will be
unable or unwilling to perform its obligations; that the Fund will be
unable to enforce contractual remedies if its counterparty defaults; that
if a counterparty (or an affiliate of a counterparty) becomes bankrupt,
the Fund may experience significant delays in obtaining any recovery or
may obtain limited or no recovery in a bankruptcy or other insolvency
proceeding. To the extent that the Fund enters into multiple transactions
with a single or a small set of counterparties, it will be subject to
increased counterparty risk. |
• |
debt securities
risks: |
¡ |
credit
risk: the risk that an issuer, counterparty or other obligor to the Fund
will fail to pay its obligations to the Fund when they are due, which may
reduce the Fund’s income and/or reduce, in whole or in part, the value of
the Fund’s investment. Actual or perceived changes in the financial
condition of an obligor, changes in economic, social or political
conditions that affect a particular type of security, instrument, or
obligor, and changes in economic, social
or |
political
conditions generally can increase the risk of default by an obligor, which
can affect a security’s or other instrument’s credit quality or value and
an obligor’s ability to honor its obligations when due. The values of
lower-quality debt securities (including debt securities commonly known as
“high yield” securities or “junk bonds”), including floating rate loans,
tend to be particularly sensitive to these changes. Certain debt
securities in the lowest investment grade category also may be considered
to possess some speculative characteristics by certain rating agencies.
The values of securities or instruments also may decline for a number of
other reasons that relate directly to the obligor, such as management
performance, financial leverage, and reduced demand for the obligor’s
goods and services, as well as the historical and prospective earnings of
the obligor and the value of its
assets. |
¡ |
extension risk:
the risk that if interest rates rise, repayments of
principal on certain debt securities, including, but not limited to,
floating rate loans and mortgage-related securities, may occur at a slower
rate than expected and the expected maturity of those securities could
lengthen as a result. Securities that are subject to extension risk
generally have a greater potential for loss when prevailing interest rates
rise, which could cause their values to fall
sharply. |
¡ |
interest rate
risk: the risk that debt instruments will change in value
because of changes in interest rates. The value of an instrument with a
longer duration (whether positive or negative) will be more sensitive to
changes in interest rates than a similar instrument with a shorter
duration. Bonds and other debt instruments typically have a positive
duration. The value of a debt instrument with positive duration will
generally decline if interest rates increase. Certain other investments,
such as inverse floaters and certain derivative instruments, may have a
negative duration. The value of instruments with a negative duration will
generally decline if interest rates decrease. Inverse floaters,
interest-only and principal-only securities are especially sensitive to
interest rate changes, which can affect not only their prices but can also
change the income flows and repayment assumptions about those investments.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. The risks associated with
rising interest rates are heightened under current market conditions given
that the U.S. Federal Reserve has raised interest rates from historically
low levels and may continue to do so. Fiscal, economic, monetary or other
government policies or measures have in the past, and may in the future,
cause or exacerbate risks associated with interest rates, including
changes in interest rates. Further, in market environments where interest
rates are rising, issuers may be less willing or able to make principal
and interest payments on fixed-income investments when
due. |
¡ |
prepayment
risk: the risk that the issuer of a debt security, including
floating rate loans and mortgage-related securities, repays all or a
portion of the principal prior to the security’s maturity. In times of
declining interest rates, there is a greater likelihood that the Fund’s
higher yielding securities will be pre‑paid with the Fund being unable to
reinvest the proceeds in an investment with as great a yield. Prepayments
can therefore result in lower yields to shareholders of the
Fund. |
• |
defaulted
securities risk: the significant risk of the uncertainty of
repayment of defaulted securities (e.g., a security on which a principal or
interest payment is not made when due) and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant
default, in workout or restructuring or in bankruptcy or similar
proceedings). Such investments entail high risk and have speculative
characteristics. |
• |
derivatives
risk: the risk that an investment in derivatives will not
perform as anticipated by the Adviser, may not be available at the time or
price desired, cannot be closed out at a favorable time or price, will
increase the Fund’s transaction costs, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute for or alternative to a direct cash
investment, the transaction may not provide a return that corresponds
precisely or at all with that of the cash investment; that the positions
may be improperly executed or constructed; that the Fund’s counterparty
will be unable or unwilling to perform its obligations; or that, when used
for hedging purposes, derivatives will not provide the anticipated
protection, causing the Fund to lose money on both the derivatives
transaction and the exposure the Fund sought to
hedge. |
• |
financial
services risk: the risk that an investment in issuers in the
financial services sector or transactions with one or more counterparties
in the financial services sector may be adversely affected by, among other
things: (i) changes in governmental regulation, which may limit both
the amounts and the types of loans and other financial commitments
financial services companies can make, the interest rates and fees they
can charge, the scope of their activities, the prices they can charge and
the amount of capital they must maintain; (ii) fluctuations,
including as a result of interest rate changes or increased competition,
in the availability and cost of capital funds on which the profitability
of financial services companies is largely dependent;
(iii) deterioration of the credit markets; (iv) credit losses
resulting from financial difficulties of borrowers, especially when
financial services companies are exposed to non‑diversified or
concentrated loan |
portfolios;
(v) financial losses associated with investment activities,
especially when financial services companies are exposed to financial
leverage; (vi) the risk that any financial services company
experiences substantial declines in the valuations of its assets, takes
action to raise capital, or ceases operations; (vii) the risk that a
market shock or other unexpected market, economic, political, regulatory,
or other event might lead to a sudden decline in the values of most or all
companies in the financial services sector; (viii) events leading to
limited liquidity, defaults, non‑performance or other adverse developments
that affect financial institutions or the financial services industry
generally, or concerns or rumors about any events of these kinds or other
similar risks, leading to market-wide liquidity problems; and
(ix) the interconnectedness or interdependence among financial
services companies, including the risk that the financial distress or
failure of one financial services company may materially and adversely
affect a number of other financial services
companies. |
• |
high yield
risk: the risk that debt instruments rated below investment
grade or debt instruments that are unrated and of comparable or lesser
quality are predominantly speculative. These instruments, commonly known
as “junk bonds,” have a higher degree of default risk and may be less
liquid than higher-rated bonds. These instruments may be subject to
greater price volatility due to such factors as specific corporate
developments, interest rate sensitivity, negative perceptions of high
yield investments generally, and less secondary market
liquidity. |
• |
inflation-indexed bond risk: the
risk that such bonds will change in value in response to actual or
anticipated changes in inflation rates in a manner unanticipated by the
Fund’s portfolio management team or investors generally. Inflation-indexed
bonds are subject to debt securities
risks. |
• |
leveraging
risk: the risk that certain investments by the Fund
involving leverage may have the effect of increasing the volatility of the
value of the Fund’s portfolio, and the risk of loss in excess of invested
capital. |
• |
liquidity risk:
the risk that the Fund may be unable to sell a portfolio
investment at a desirable time or at the value the Fund has placed on the
investment. Illiquidity may be the result of, for example, low trading
volume, lack of a market maker, or contractual or legal restrictions that
limit or prevent the Fund from selling securities or closing derivative
positions. During periods of substantial market disruption, a large
portion of the Fund’s assets could potentially experience significant
levels of illiquidity. The values of illiquid investments are often more
volatile than the values of more liquid investments. It may be more
difficult for the Fund to determine a fair value of an illiquid investment
than that of a more liquid comparable
investment. |
• |
loan
risk: the risk that (i) if the Fund holds a loan
through another financial intermediary, or relies on a financial
intermediary to administer the loan, its receipt of principal and interest
on the loan may be subject to the credit risk of that financial
intermediary; (ii) any collateral securing a loan may be insufficient
or unavailable to the Fund, because, for example, the value of the
collateral securing a loan can decline, be insufficient to meet the
obligations of the borrower, or be difficult to liquidate, and the Fund’s
rights to collateral may be limited by bankruptcy or insolvency laws;
(iii) investments in highly leveraged loans or loans of stressed,
distressed, or defaulted issuers may be subject to significant credit and
liquidity risk; (iv) a bankruptcy or other court proceeding could
delay or limit the ability of the Fund to collect the principal and
interest payments on that borrower’s loans or adversely affect the Fund’s
rights in collateral relating to a loan; (v) there may be limited
public information available regarding the loan and the relevant
borrower(s); (vi) the use of a particular interest rate benchmark may
limit the Fund’s ability to achieve a net return to shareholders that
consistently approximates the average published Prime Rate of U.S. banks;
(vii) the prices of certain floating rate loans that include a
feature that prevents their interest rates from adjusting if market
interest rates are below a specified minimum level may appreciate less
than other instruments in response to changes in interest rates should
interest rates rise but remain below the applicable minimum level;
(viii) if a borrower fails to comply with various restrictive
covenants that may be found in loan agreements, the borrower may default
in payment of the loan; (ix) if the Fund invests in loans that
contain fewer or less restrictive constraints on the borrower than certain
other types of loans (“covenant-lite” loans), it may have fewer rights
against the borrowers of such loans, including fewer protections against
the possibility of default and fewer remedies in the event of default;
(x) the loan is unsecured; (xi) there is a limited secondary
market; (xii) transactions in loans may settle on a delayed basis,
and the Fund may not receive the proceeds from the sale of a loan for a
substantial period of time after the sale, which may result in sale
proceeds related to the sale of loans not being available to make
additional investments or to meet the Fund’s redemption obligations until
potentially a substantial period after the sale of the loans; and
(xiii) loans may be difficult to value and may be illiquid, which may
adversely affect an investment in the Fund. The Fund may invest in loans
directly or indirectly by investing in shares of the DoubleLine Floating
Rate Fund and in either case will be subject to the risks described
above. |
• |
market risk:
the risk that markets will perform poorly or that the
returns from the securities in which the Fund invests will underperform
returns from the general securities markets or other types of investments.
Markets may, in response to |
governmental
actions or intervention or general market conditions, including real or
perceived adverse political, economic or market conditions, tariffs and
trade disruptions, inflation, recession, changes in interest or currency
rates, lack of liquidity in the bond markets or adverse investor
sentiment, or other external factors, experience periods of high
volatility and reduced liquidity. During those periods, the Fund may
experience high levels of shareholder redemptions, and may have to sell
securities at times when the Fund would otherwise not do so, and
potentially at unfavorable prices. Certain securities may be difficult to
value during such periods. Market risk involves the risk that the value of
the Fund’s investment portfolio will change, potentially frequently and in
large amounts, as the prices of its investments go up or down. During
periods of severe market stress, it is possible that the market for some
or all of a Fund’s investments may become highly illiquid. Recently, there
have been inflationary price movements, which have caused the fixed income
securities markets to experience heightened levels of interest rate
volatility and liquidity risk. Please see “debt securities risks —
interest rate risk” herein for more
information. |
• |
mortgage-backed
securities risk: the risk that borrowers may default on
their mortgage obligations or the guarantees underlying the
mortgage-backed securities will default or otherwise fail and that, during
periods of falling interest rates, mortgage-backed securities will be
called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate. During periods of
rising interest rates, the average life of a mortgage-backed security may
extend, which may lock in a below-market interest rate, increase the
security’s duration, and reduce the value of the security. Enforcing
rights against the underlying assets or collateral may be difficult, or
the underlying assets or collateral may be insufficient if the issuer
defaults. The values of certain types of mortgage-backed securities, such
as inverse floaters and interest-only and principal-only securities, may
be extremely sensitive to changes in interest rates and prepayment rates.
The Fund may invest in mortgage-backed securities that are subordinate in
their right to receive payment of interest and repayment of principal to
other classes of the issuer’s
securities. |
• |
operational and
information security risks: an investment in the Fund, like
any fund, can involve operational risks arising from factors such as
processing errors, human errors, inadequate or failed internal or external
processes, failures in systems and technology, changes in personnel and
errors caused by third-party service providers. The occurrence of any of
these failures, errors or breaches could result in investment losses to
the Fund, a loss of information, regulatory scrutiny, reputational damage
or other events, any of which could have a material adverse effect on the
Fund. While the Fund seeks to minimize such events through controls and
oversight, there may still be failures that could cause losses to the
Fund. |
• |
real estate
sector risk: the risk that real estate-related investments
may decline in value as a result of factors affecting the real estate
sector, such as the supply of real property in certain markets, changes in
zoning laws, delays in completion of construction, changes in real estate
values, changes in property taxes, levels of occupancy, and local,
regional, and general market conditions. Along with the risks common to
different types of real estate-related investments, real estate investment
trusts (“REITs”), no matter the
type, involve additional risk factors, including poor performance by the
REIT’s manager, adverse changes to the tax laws, and the possible failure
by the REIT to qualify for the favorable tax treatment available to REITs
under the Internal Revenue Code of 1986, as amended, or the exemption from
registration under the Investment Company Act of 1940, as amended. REITs
are not diversified and are heavily dependent on cash flow earned on the
property interests they hold. |
• |
restricted
securities risk: the risk that the Fund may be prevented or
limited by law or the terms of an agreement from selling a security (a
“restricted security”). To the
extent that the Fund is permitted to sell a restricted security, there can
be no assurance that a trading market will exist at any particular time,
and the Fund may be unable to dispose of the security promptly at
reasonable prices or at all. The Fund may have to bear the expense of
registering the securities for resale and the risk of substantial delays
in effecting the registration. Also, restricted securities may be
difficult to value because market quotations may not be readily available,
and the values of restricted securities may have significant
volatility. |
• |
securities or
sector selection risk: the risk that the securities held by
the Fund will underperform securities held in other funds investing in
similar asset classes or comparable benchmarks because of the portfolio
managers’ choice of securities or sectors for investment. To the extent
the Fund allocates a higher percentage of its investment portfolio to a
particular sector or related sectors, the Fund will be more susceptible to
events or factors affecting companies in that sector or related sectors.
For example, the values of securities of companies in the same or related
sectors may be negatively affected by the common characteristics they
share, the common business risks to which they are subject, common
regulatory burdens, or regulatory changes that affect them similarly. Such
characteristics, risks, burdens or changes include, but are not limited
to, changes in governmental regulation, inflation or deflation, rising or
falling interest rates, competition from new entrants, and other economic,
market, political or other developments specific to that sector or related
sectors. |
• |
structured
products and structured notes risk: the risk that an
investment in a structured product, which includes, among other things,
collateralized debt obligations, mortgage-backed securities, other types
of asset-backed securities and certain types of structured notes, may
decline in value due to changes in the underlying instruments, indexes,
interest rates or other factors on which the product is based (“reference measure”). Depending on the reference
measure used and the use of multipliers or deflators (if any), changes in
interest rates and movement of the reference measure may cause significant
price and cash flow fluctuations. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique.
Holders of structured products indirectly bear risks associated with the
reference measure, are subject to counterparty risk and typically do not
have direct rights against the reference measure. Structured products are
generally privately offered and sold, and thus, are not registered under
the securities laws and may be thinly traded or have a limited trading
market and may have the effect of increasing the Fund’s illiquidity,
reducing the Fund’s income and the value of the investment. At a
particular point in time, the Fund may be unable to find qualified buyers
for these securities. Investments in structured notes involve risks
including interest rate risk, credit risk and market
risk. |
• |
U.S. Government
securities risk: the risk that debt securities issued or
guaranteed by certain U.S. Government agencies, instrumentalities, and
sponsored enterprises are not supported by the full faith and credit of
the U.S. Government, and so investments in their securities or obligations
issued by them involve credit risk greater than investments in other types
of U.S. Government securities. |
• |
valuation
risk: the risk that the Fund will not value its investments
in a manner that accurately reflects their market values or that the Fund
will not be able to sell any investment at a price equal to the valuation
ascribed to that investment for purposes of calculating the Fund’s net
asset value (“NAV”). The valuation
of the Fund’s investments involves subjective judgment. Certain securities
in which the Fund may invest may be more difficult to value accurately,
especially during periods of market disruptions or extreme market
volatility. Incorrect valuations of the Fund’s portfolio holdings could
result in the Fund’s shareholder transactions being effected at an NAV
that does not accurately reflect the underlying value of the Fund’s
portfolio, resulting in the dilution of shareholder
interests. |
|
Quarter
ended | |||
- |
Quarter
ended |
One Year | Five Years | Ten Years |
Since Inception
( | |||||||||||||||||
Class I | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Return
After Taxes on Distributions |
- |
|||||||||||||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
- |
|||||||||||||||||||
Class N |
| |||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Class R61 | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) | ||||||||||||||||||||
Bloomberg U.S. Mortgage Backed Securities (MBS)
Index
(reflects no deduction for fees, expenses or
taxes) |
1 | Class R6
shares were not available for purchase until July 31, 2019. The
performance shown for Class R6 shares prior to that date is that of
the Class I shares of the Fund, another class of the Fund that is
invested in the same portfolio of securities as Class R6 shares.
Annual returns of Class R6 shares would have differed from that shown
for the period prior to July 31, 2019 only to the extent that
Class R6 shares and Class I shares have different
expenses. |
Name |
Experience
with
the
Fund |
Primary Title with the
Investment
Adviser | ||
Jeffrey E. Gundlach | Since the Fund’s inception in April 2010 | Chief Executive Officer | ||
Andrew Hsu | Since July 2019 | Portfolio Manager | ||
Ken Shinoda | Since July 2020 | Portfolio Manager |
Minimum Initial Investment: | Subsequent Investment: |
|||||||||||
Regular
Accounts |
IRAs/HSAs |
All Accounts and
Automatic
Investment Plans |
||||||||||
Class I Shares | $ | 100,000 | $ | 5,000 | $ | 100 | ||||||
Class N Shares | $ | 2,000 | $ | 500 | $ | 100 | ||||||
Class R6 Shares | None* | N/A | N/A |
* |
See
eligibility limitations below. |
Share Class | Class I | Class N | Class R6 | |||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) | ||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the original purchase price) | ||||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||||
Redemption Fee (as a percentage of shares redeemed within 90 days of purchase) | ||||||
Fee for Redemption by Wire | $ |
$ |
$ | |||
Exchange Fee | ||||||
Account Fee |
Share Class | Class I | Class N | Class R6 | |||||||||
Management Fees | ||||||||||||
Distribution and/or Service (12b‑1) Fees | ||||||||||||
Other Expenses (includes sub‑transfer agent accounting or administrative services expenses) | ||||||||||||
Acquired Fund Fees and Expenses1 | ||||||||||||
Total Annual Fund Operating Expenses Before Fee Waiver and/or Expense Reimbursement | ||||||||||||
Fee
Waiver and/or Expense Reimbursement1 |
- |
- |
- |
|||||||||
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement1 |
1 |
Class I | Class N | Class R6 | ||||
1 Year | $ |
$ |
$ | |||
3 Years | $ |
$ |
$ | |||
5 Years | $ |
$ |
$ | |||
10 Years | $ |
$ |
$ |
• |
active
management risk: the risk that the Fund will fail to meet
its investment objective and that the Fund’s investment performance will
depend, at least in part, on how its assets are allocated and reallocated
among asset classes, sectors, underlying funds and/or investments and that
such allocation will focus on asset classes, sectors, underlying funds,
and/or investments that perform poorly or underperform other asset
classes, sectors, underlying funds, and/or available investments. Any
given investment strategy may fail to produce the intended results, and
the Fund’s portfolio may underperform other comparable funds because of
portfolio management decisions related to, among other things, the
selection of investments, portfolio construction, risk assessments, and/or
the outlook on market trends and
opportunities. |
• |
asset-backed
securities investment risk: the risk that borrowers may
default on the obligations that underlie the asset-backed security and
that, during periods of falling interest rates, asset-backed securities
may be called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate, and the risk that
the impairment of the value of the collateral underlying a security in
which the Fund invests (due, for example, to non‑payment of loans) will
result in a reduction in the value of the
security. |
• |
counterparty
risk: the risk that the Fund will be subject to credit risk
with respect to the counterparties to the derivative contracts and other
instruments entered into by the Fund; that the Fund’s counterparty will be
unable or unwilling to perform its obligations; that the Fund will be
unable to enforce contractual remedies if its counterparty defaults; that
if a counterparty (or an affiliate of a counterparty) becomes bankrupt,
the Fund may experience significant delays in obtaining any recovery or
may obtain limited or no recovery in a bankruptcy or other insolvency
proceeding. To the extent that the Fund enters into multiple transactions
with a single or a small set of counterparties, it will be subject to
increased counterparty risk. |
• |
debt securities
risks: |
¡ |
credit risk:
the risk that an issuer, counterparty or other obligor to
the Fund will fail to pay its obligations to the Fund when they are due,
which may reduce the Fund’s income and/or reduce, in whole or in part, the
value of the Fund’s investment. Actual or perceived changes in the
financial condition of an obligor, changes in economic, social or
political conditions that affect a particular type of security,
instrument, or obligor, and changes in economic, social or political
conditions generally can increase the risk of default by an obligor, which
can affect a security’s or other instrument’s credit quality or value and
an obligor’s ability to honor its obligations when due. The values of
lower-quality debt securities (including debt securities commonly known as
“high yield” securities or “junk bonds”), including floating rate loans,
tend to be particularly sensitive to these changes. Certain debt
securities in the lowest investment grade category also may be considered
to possess some speculative characteristics by certain rating agencies.
The values of securities or instruments also may decline for a number of
other reasons that relate directly to the obligor, such as management
performance, financial leverage, and reduced demand for the obligor’s
goods and services, as well as the historical and prospective earnings of
the obligor and the value of its
assets. |
¡ |
extension risk:
the risk that if interest rates rise, repayments of
principal on certain debt securities, including, but not limited to,
floating rate loans and mortgage-related securities, may occur at a slower
rate than expected and the expected maturity of those securities could
lengthen as a result. Securities that are subject to extension risk
generally have a greater potential for loss when prevailing interest rates
rise, which could cause their values to fall
sharply. |
¡ |
interest rate
risk: the risk that debt instruments will change in value
because of changes in interest rates. The value of an instrument with a
longer duration (whether positive or negative) will be more sensitive to
changes in interest rates than a similar instrument with a shorter
duration. Bonds and other debt instruments typically have a positive
duration. The value of a debt instrument with positive duration will
generally decline if interest rates increase. Certain other investments,
such as inverse floaters and certain derivative instruments, may have a
negative duration. The value of instruments with a negative duration will
generally decline if interest rates decrease. Inverse floaters,
interest-only and principal-only securities are especially sensitive to
interest rate changes, which can affect not only their prices but can also
change the income flows and repayment assumptions about those investments.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. The risks associated with
rising interest rates are heightened under current market conditions given
that the U.S. Federal Reserve has raised interest rates from historically
low levels and may continue to do so. Fiscal, economic, monetary or other
government policies or measures have in the past, and may in the future,
cause or exacerbate risks associated with interest rates, including
changes in interest rates. Further, in market environments where interest
rates are rising, issuers may be less willing or able to make principal
and interest payments on fixed-income investments when
due. |
¡ |
prepayment
risk: the risk that the issuer of a debt security, including
floating rate loans and mortgage-related securities, repays all or a
portion of the principal prior to the security’s maturity. In times of
declining interest rates, there is a greater likelihood that the Fund’s
higher yielding securities will be pre‑paid with the Fund being unable to
reinvest the proceeds in an investment with as great a yield. Prepayments
can therefore result in lower yields to shareholders of the
Fund. |
• |
defaulted
securities risk: the significant risk of the uncertainty of
repayment of defaulted securities (e.g., a security on which a principal or
interest payment is not made when due) and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant
default, in workout or restructuring or in bankruptcy or similar
proceedings). Such investments entail high risk and have speculative
characteristics. |
• |
derivatives
risk: the risk that an investment in derivatives will not
perform as anticipated by the Adviser, may not be available at the time or
price desired, cannot be closed out at a favorable time or price, will
increase the Fund’s transaction costs, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that,
when |
a
derivative is used as a substitute for or alternative to a direct cash
investment, the transaction may not provide a return that corresponds
precisely or at all with that of the cash investment; that the positions
may be improperly executed or constructed; that the Fund’s counterparty
will be unable or unwilling to perform its obligations; or that, when used
for hedging purposes, derivatives will not provide the anticipated
protection, causing the Fund to lose money on both the derivatives
transaction and the exposure the Fund sought to
hedge. |
• |
emerging market
country risk: the risk that investing in emerging markets,
as compared to foreign developed markets, increases the likelihood that
the Fund will lose money, due to more limited information about the issuer
and/or the security; higher brokerage costs; different accounting,
auditing and financial reporting standards; less developed legal systems
and thinner trading markets; the possibility of currency blockages or
transfer restrictions; an emerging market country’s dependence on revenue
from particular commodities or international aid; and expropriation,
nationalization or other adverse political or economic
developments. |
• |
financial
services risk: the risk that an investment in issuers in the
financial services sector or transactions with one or more counterparties
in the financial services sector may be adversely affected by, among other
things: (i) changes in governmental regulation, which may limit both
the amounts and the types of loans and other financial commitments
financial services companies can make, the interest rates and fees they
can charge, the scope of their activities, the prices they can charge and
the amount of capital they must maintain; (ii) fluctuations,
including as a result of interest rate changes or increased competition,
in the availability and cost of capital funds on which the profitability
of financial services companies is largely dependent;
(iii) deterioration of the credit markets; (iv) credit losses
resulting from financial difficulties of borrowers, especially when
financial services companies are exposed to non‑diversified or
concentrated loan portfolios; (v) financial losses associated with
investment activities, especially when financial services companies are
exposed to financial leverage; (vi) the risk that any financial
services company experiences substantial declines in the valuations of its
assets, takes action to raise capital, or ceases operations;
(vii) the risk that a market shock or other unexpected market,
economic, political, regulatory, or other event might lead to a sudden
decline in the values of most or all companies in the financial services
sector; (viii) events leading to limited liquidity, defaults,
non‑performance or other adverse developments that affect financial
institutions or the financial services industry generally, or concerns or
rumors about any events of these kinds or other similar risks, leading to
market-wide liquidity problems; and (ix) the interconnectedness or
interdependence among financial services companies, including the risk
that the financial distress or failure of one financial services company
may materially and adversely affect a number of other financial services
companies. |
• |
foreign
currency risk: the risk that fluctuations in exchange rates
may adversely affect the value of the Fund’s investments denominated in
foreign currencies. |
• |
foreign
investing risk: the risk that investments in foreign
securities or in issuers with significant exposure to foreign markets, as
compared to investments in U.S. securities or in issuers with
predominantly domestic market exposure, may be more vulnerable to
economic, political, and social instability and subject to less government
supervision, less protective custody practices, lack of transparency,
inadequate regulatory and accounting standards, delayed or infrequent
settlement of transactions, and foreign taxes. If the Fund buys securities
denominated in a foreign currency, receives income in foreign currencies,
or holds foreign currencies from time to time, the value of the Fund’s
assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Foreign markets are also subject to the risk that a foreign
government could restrict foreign exchange transactions or otherwise
implement unfavorable currency regulations. In addition, foreign
securities may be subject to currency exchange rates or regulations, the
imposition of economic sanctions, tariffs or other government
restrictions, higher transaction and other costs, reduced liquidity, and
delays in settlement. |
• |
high yield
risk: the risk that debt instruments rated below investment
grade or debt instruments that are unrated and of comparable or lesser
quality are predominantly speculative. These instruments, commonly known
as “junk bonds,” have a higher degree of default risk and may be less
liquid than higher-rated bonds. These instruments may be subject to
greater price volatility due to such factors as specific corporate
developments, interest rate sensitivity, negative perceptions of high
yield investments generally, and less secondary market
liquidity. |
• |
inflation-indexed bond risk: the
risk that such bonds will change in value in response to actual or
anticipated changes in inflation rates in a manner unanticipated by the
Fund’s portfolio management team or investors generally. Inflation-indexed
bonds are subject to debt securities
risks. |
• |
investment
company and exchange-traded fund risk: the risk that an
investment company or other pooled investment vehicle, including any ETFs
or money market funds, in which the Fund invests will not achieve its
investment objective or execute its investment strategies effectively or
that significant purchase or redemption activity by shareholders of such
an |
investment
company might negatively affect the value of its shares. The Fund must pay
its pro rata portion of an investment company’s fees and expenses. To the
extent the Adviser determines to invest Fund assets in other investment
companies, the Adviser will have an incentive to invest in other
DoubleLine funds over investment companies sponsored or managed by others
and to maintain such investments once made due to its own financial
interest in those products and other business
considerations. |
• |
leveraging
risk: the risk that certain investments by the Fund
involving leverage may have the effect of increasing the volatility of the
value of the Fund’s portfolio, and the risk of loss in excess of invested
capital. |
• |
liquidity risk:
the risk that the Fund may be unable to sell a portfolio
investment at a desirable time or at the value the Fund has placed on the
investment. Illiquidity may be the result of, for example, low trading
volume, lack of a market maker, or contractual or legal restrictions that
limit or prevent the Fund from selling securities or closing derivative
positions. During periods of substantial market disruption, a large
portion of the Fund’s assets could potentially experience significant
levels of illiquidity. The values of illiquid investments are often more
volatile than the values of more liquid investments. It may be more
difficult for the Fund to determine a fair value of an illiquid investment
than that of a more liquid comparable
investment. |
• |
loan
risk: the risk that (i) if the Fund holds a loan
through another financial intermediary, or relies on a financial
intermediary to administer the loan, its receipt of principal and interest
on the loan may be subject to the credit risk of that financial
intermediary; (ii) any collateral securing a loan may be insufficient
or unavailable to the Fund, because, for example, the value of the
collateral securing a loan can decline, be insufficient to meet the
obligations of the borrower, or be difficult to liquidate, and the Fund’s
rights to collateral may be limited by bankruptcy or insolvency laws;
(iii) investments in highly leveraged loans or loans of stressed,
distressed, or defaulted issuers may be subject to significant credit and
liquidity risk; (iv) a bankruptcy or other court proceeding could
delay or limit the ability of the Fund to collect the principal and
interest payments on that borrower’s loans or adversely affect the Fund’s
rights in collateral relating to a loan; (v) there may be limited
public information available regarding the loan and the relevant
borrower(s); (vi) the use of a particular interest rate benchmark may
limit the Fund’s ability to achieve a net return to shareholders that
consistently approximates the average published Prime Rate of U.S. banks;
(vii) the prices of certain floating rate loans that include a
feature that prevents their interest rates from adjusting if market
interest rates are below a specified minimum level may appreciate less
than other instruments in response to changes in interest rates should
interest rates rise but remain below the applicable minimum level;
(viii) if a borrower fails to comply with various restrictive
covenants that may be found in loan agreements, the borrower may default
in payment of the loan; (ix) if the Fund invests in loans that
contain fewer or less restrictive constraints on the borrower than certain
other types of loans (“covenant-lite” loans), it may have fewer rights
against the borrowers of such loans, including fewer protections against
the possibility of default and fewer remedies in the event of default;
(x) the loan is unsecured; (xi) there is a limited secondary
market; (xii) transactions in loans may settle on a delayed basis,
and the Fund may not receive the proceeds from the sale of a loan for a
substantial period of time after the sale, which may result in sale
proceeds related to the sale of loans not being available to make
additional investments or to meet the Fund’s redemption obligations until
potentially a substantial period after the sale of the loans; and
(xiii) loans may be difficult to value and may be illiquid, which may
adversely affect an investment in the Fund. The Fund may invest in loans
directly or indirectly by investing in shares of the DoubleLine Floating
Rate Fund and in either case will be subject to the risks described
above. |
• |
market risk:
the risk that markets will perform poorly or that the
returns from the securities in which the Fund invests will underperform
returns from the general securities markets or other types of investments.
Markets may, in response to governmental actions or intervention or
general market conditions, including real or perceived adverse political,
economic or market conditions, tariffs and trade disruptions, inflation,
recession, changes in interest or currency rates, lack of liquidity in the
bond markets or adverse investor sentiment, or other external factors,
experience periods of high volatility and reduced liquidity. During those
periods, the Fund may experience high levels of shareholder redemptions,
and may have to sell securities at times when the Fund would otherwise not
do so, and potentially at unfavorable prices. Certain securities may be
difficult to value during such periods. Market risk involves the risk that
the value of the Fund’s investment portfolio will change, potentially
frequently and in large amounts, as the prices of its investments go up or
down. During periods of severe market stress, it is possible that the
market for some or all of a Fund’s investments may become highly illiquid.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. Please see “debt securities
risks — interest rate risk” herein for more
information. |
• |
mortgage-backed
securities risk: the risk that borrowers may default on
their mortgage obligations or the guarantees underlying the
mortgage-backed securities will default or otherwise fail and that, during
periods of falling interest rates, mortgage-backed securities will be
called or prepaid, which may result in the Fund having to reinvest
proceeds in other |
investments
at a lower interest rate. During periods of rising interest rates, the
average life of a mortgage-backed security may extend, which may lock in a
below-market interest rate, increase the security’s duration, and reduce
the value of the security. Enforcing rights against the underlying assets
or collateral may be difficult, or the underlying assets or collateral may
be insufficient if the issuer defaults. The values of certain types of
mortgage-backed securities, such as inverse floaters and interest-only and
principal-only securities, may be extremely sensitive to changes in
interest rates and prepayment rates. The Fund may invest in
mortgage-backed securities that are subordinate in their right to receive
payment of interest and repayment of principal to other classes of the
issuer’s securities. |
• |
operational and
information security risks: an investment in the Fund, like
any fund, can involve operational risks arising from factors such as
processing errors, human errors, inadequate or failed internal or external
processes, failures in systems and technology, changes in personnel and
errors caused by third-party service providers. The occurrence of any of
these failures, errors or breaches could result in investment losses to
the Fund, a loss of information, regulatory scrutiny, reputational damage
or other events, any of which could have a material adverse effect on the
Fund. While the Fund seeks to minimize such events through controls and
oversight, there may still be failures that could cause losses to the
Fund. |
• |
portfolio
turnover risk: the risk that frequent purchases and sales of
portfolio securities may result in higher Fund expenses and may result in
larger distributions of taxable capital gains to investors as compared to
a fund that trades less
frequently. |
• |
real estate
sector risk: the risk that real estate-related investments
may decline in value as a result of factors affecting the real estate
sector, such as the supply of real property in certain markets, changes in
zoning laws, delays in completion of construction, changes in real estate
values, changes in property taxes, levels of occupancy, and local,
regional, and general market conditions. Along with the risks common to
different types of real estate-related investments, real estate investment
trusts (“REITs”), no matter the
type, involve additional risk factors, including poor performance by the
REIT’s manager, adverse changes to the tax laws, and the possible failure
by the REIT to qualify for the favorable tax treatment available to REITs
under the Internal Revenue Code of 1986, as amended, or the exemption from
registration under the Investment Company Act of 1940, as amended. REITs
are not diversified and are heavily dependent on cash flow earned on the
property interests they hold. |
• |
restricted
securities risk: the risk that the Fund may be prevented or
limited by law or the terms of an agreement from selling a security (a
“restricted security”). To the
extent that the Fund is permitted to sell a restricted security, there can
be no assurance that a trading market will exist at any particular time,
and the Fund may be unable to dispose of the security promptly at
reasonable prices or at all. The Fund may have to bear the expense of
registering the securities for resale and the risk of substantial delays
in effecting the registration. Also, restricted securities may be
difficult to value because market quotations may not be readily available,
and the values of restricted securities may have significant
volatility. |
• |
securities or
sector selection risk: the risk that the securities held by
the Fund will underperform securities held in other funds investing in
similar asset classes or comparable benchmarks because of the portfolio
managers’ choice of securities or sectors for investment. To the extent
the Fund allocates a higher percentage of its investment portfolio to a
particular sector or related sectors, the Fund will be more susceptible to
events or factors affecting companies in that sector or related sectors.
For example, the values of securities of companies in the same or related
sectors may be negatively affected by the common characteristics they
share, the common business risks to which they are subject, common
regulatory burdens, or regulatory changes that affect them similarly. Such
characteristics, risks, burdens or changes include, but are not limited
to, changes in governmental regulation, inflation or deflation, rising or
falling interest rates, competition from new entrants, and other economic,
market, political or other developments specific to that sector or related
sectors. |
• |
structured
products and structured notes risk: the risk that an
investment in a structured product, which includes, among other things,
collateralized debt obligations, mortgage-backed securities, other types
of asset-backed securities and certain types of structured notes, may
decline in value due to changes in the underlying instruments, indexes,
interest rates or other factors on which the product is based (“reference measure”). Depending on the reference
measure used and the use of multipliers or deflators (if any), changes in
interest rates and movement of the reference measure may cause significant
price and cash flow fluctuations. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique.
Holders of structured products indirectly bear risks associated with the
reference measure, are subject to counterparty risk and typically do not
have direct rights against the reference measure. Structured products are
generally privately offered and sold, and thus, are not registered under
the securities laws and may be thinly traded or have a limited trading
market and may have the effect of increasing the Fund’s illiquidity,
reducing |
the
Fund’s income and the value of the investment. At a particular point in
time, the Fund may be unable to find qualified buyers for these
securities. Investments in structured notes involve risks including
interest rate risk, credit risk and market
risk. |
• |
U.S. Government
securities risk: the risk that debt securities issued or
guaranteed by certain U.S. Government agencies, instrumentalities, and
sponsored enterprises are not supported by the full faith and credit of
the U.S. Government, and so investments in their securities or obligations
issued by them involve credit risk greater than investments in other types
of U.S. Government securities. |
• |
valuation
risk: the risk that the Fund will not value its investments
in a manner that accurately reflects their market values or that the Fund
will not be able to sell any investment at a price equal to the valuation
ascribed to that investment for purposes of calculating the Fund’s net
asset value (“NAV”). The valuation
of the Fund’s investments involves subjective judgment. Certain securities
in which the Fund may invest may be more difficult to value accurately,
especially during periods of market disruptions or extreme market
volatility. Incorrect valuations of the Fund’s portfolio holdings could
result in the Fund’s shareholder transactions being effected at an NAV
that does not accurately reflect the underlying value of the Fund’s
portfolio, resulting in the dilution of shareholder
interests. |
|
Quarter
ended | |||
- |
Quarter
ended |
One Year | Five Years | Ten Years |
Since Inception
( | |||||||||||||||||
Class I | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Return
After Taxes on Distributions |
- |
|||||||||||||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
||||||||||||||||||||
Class N |
| |||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Class R61 | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Bloomberg U.S. Aggregate Bond
Index (reflects no deduction for fees, expenses or taxes) |
1 | Class R6
shares were not available for purchase until July 31, 2019. The
performance shown for Class R6 shares prior to that date is that of
the Class I shares of the Fund, another class of the Fund that is
invested in the same portfolio of securities as Class R6 shares.
Annual returns of Class R6 shares would have differed from that shown
for the period prior to July 31, 2019 only to the extent that
Class R6 shares and Class I shares have different
expenses. |
Name |
Experience
with
the
Fund |
Primary
Title with the
Investment
Adviser | ||
Jeffrey E. Gundlach | Since the Fund’s inception in June 2010 | Chief Executive Officer | ||
Jeffrey J. Sherman | Since September 2016 | Deputy Chief Investment Officer |
Minimum Initial Investment: | Subsequent Investment: |
|||||||||||
Regular Accounts |
IRAs/HSAs |
All Accounts and
Automatic Investment Plans |
||||||||||
Class I Shares | $ | 100,000 | $ | 5,000 | $ | 100 | ||||||
Class N Shares | $ | 2,000 | $ | 500 | $ | 100 | ||||||
Class R6 Shares | None* | N/A | N/A |
* |
See
eligibility limitations below. |
Share Class | Class I | Class N | ||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) | ||||
Maximum Deferred Sales Charge (Load) (as a percentage of the original purchase price) | ||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||
Redemption Fee (as a percentage of shares redeemed within 90 days of purchase) | ||||
Fee for Redemption by Wire | $ |
$ | ||
Exchange Fee | ||||
Account Fee |
Share Class | Class I | Class N | ||||||
Management Fees | ||||||||
Distribution and/or Service (12b‑1) Fees | ||||||||
Other Expenses (includes sub‑transfer agent accounting or administrative services expenses) | ||||||||
Acquired Fund Fees and Expenses1 | ||||||||
Total Annual Fund Operating Expenses |
1 |
Class I | Class N | |||
1 Year | $ |
$ | ||
3 Years | $ |
$ | ||
5 Years | $ |
$ | ||
10 Years | $ |
$ |
• |
public
finances; |
• |
monetary
policy; |
• |
external
accounts; |
• |
financial
markets; |
• |
foreign
investment regulations; |
• |
stability
of exchange rate policy; and |
• |
labor
conditions. |
• |
active
management risk: the risk that the Fund will fail to meet
its investment objective and that the Fund’s investment performance will
depend, at least in part, on how its assets are allocated and reallocated
among asset classes, sectors, underlying funds and/or investments and that
such allocation will focus on asset classes, sectors, underlying funds,
and/or investments that perform poorly or underperform other asset
classes, sectors, underlying funds, and/or available investments. Any
given investment strategy may fail to produce the intended results, and
the Fund’s portfolio may underperform other comparable funds because of
portfolio management decisions related to, among other things, the
selection of investments, portfolio construction, risk assessments, and/or
the outlook on market trends and
opportunities. |
• |
counterparty
risk: the risk that the Fund will be subject to credit risk
with respect to the counterparties to the derivative contracts and other
instruments entered into by the Fund; that the Fund’s counterparty will be
unable or unwilling to perform its obligations; that the Fund will be
unable to enforce contractual remedies if its counterparty defaults; that
if a counterparty (or an affiliate of a counterparty) becomes bankrupt,
the Fund may experience significant delays in obtaining any recovery or
may obtain limited or no recovery in a bankruptcy or other insolvency
proceeding. To the extent that the Fund enters into multiple transactions
with a single or a small set of counterparties, it will be subject to
increased counterparty risk. |
• |
debt securities
risks: |
¡ |
credit risk:
the risk that an issuer, counterparty or other obligor to
the Fund will fail to pay its obligations to the Fund when they are due,
which may reduce the Fund’s income and/or reduce, in whole or in part, the
value of the Fund’s investment. Actual or perceived changes in the
financial condition of an obligor, changes in economic, social or
political conditions that affect a particular type of security,
instrument, or obligor, and changes in economic, social or political
conditions generally can increase the risk of default by an obligor, which
can affect a security’s or other instrument’s credit quality or value and
an obligor’s ability to honor its obligations when due. The values of
lower-quality debt securities (including debt securities commonly known as
“high yield” securities or “junk bonds”), including floating rate loans,
tend to be particularly sensitive to these changes. Certain debt
securities in the lowest investment grade category also may be considered
to possess some speculative characteristics by certain
rating |
agencies.
The values of securities or instruments also may decline for a number of
other reasons that relate directly to the obligor, such as management
performance, financial leverage, and reduced demand for the obligor’s
goods and services, as well as the historical and prospective earnings of
the obligor and the value of its
assets. |
¡ |
extension risk:
the risk that if interest rates rise, repayments of
principal on certain debt securities, including, but not limited to,
floating rate loans and mortgage-related securities, may occur at a slower
rate than expected and the expected maturity of those securities could
lengthen as a result. Securities that are subject to extension risk
generally have a greater potential for loss when prevailing interest rates
rise, which could cause their values to fall
sharply. |
¡ |
interest rate
risk: the risk that debt instruments will change in value
because of changes in interest rates. The value of an instrument with a
longer duration (whether positive or negative) will be more sensitive to
changes in interest rates than a similar instrument with a shorter
duration. Bonds and other debt instruments typically have a positive
duration. The value of a debt instrument with positive duration will
generally decline if interest rates increase. Certain other investments,
such as inverse floaters and certain derivative instruments, may have a
negative duration. The value of instruments with a negative duration will
generally decline if interest rates decrease. Inverse floaters,
interest-only and principal-only securities are especially sensitive to
interest rate changes, which can affect not only their prices but can also
change the income flows and repayment assumptions about those investments.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. The risks associated with
rising interest rates are heightened under current market conditions given
that the U.S. Federal Reserve has raised interest rates from historically
low levels and may continue to do so. Fiscal, economic, monetary or other
government policies or measures have in the past, and may in the future,
cause or exacerbate risks associated with interest rates, including
changes in interest rates. Further, in market environments where interest
rates are rising, issuers may be less willing or able to make principal
and interest payments on fixed-income investments when
due. |
¡ |
prepayment
risk: the risk that the issuer of a debt security, including
floating rate loans and mortgage-related securities, repays all or a
portion of the principal prior to the security’s maturity. In times of
declining interest rates, there is a greater likelihood that the Fund’s
higher yielding securities will be pre‑paid with the Fund being unable to
reinvest the proceeds in an investment with as great a yield. Prepayments
can therefore result in lower yields to shareholders of the
Fund. |
• |
defaulted
securities risk: the significant risk of the uncertainty of
repayment of defaulted securities (e.g., a security on which a principal or
interest payment is not made when due) and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant
default, in workout or restructuring or in bankruptcy or similar
proceedings). Such investments entail high risk and have speculative
characteristics. |
• |
derivatives
risk: the risk that an investment in derivatives will not
perform as anticipated by the Adviser, may not be available at the time or
price desired, cannot be closed out at a favorable time or price, will
increase the Fund’s transaction costs, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute for or alternative to a direct cash
investment, the transaction may not provide a return that corresponds
precisely or at all with that of the cash investment; that the positions
may be improperly executed or constructed; that the Fund’s counterparty
will be unable or unwilling to perform its obligations; or that, when used
for hedging purposes, derivatives will not provide the anticipated
protection, causing the Fund to lose money on both the derivatives
transaction and the exposure the Fund sought to
hedge. |
• |
emerging market
country risk: the risk that investing in emerging markets,
as compared to foreign developed markets, increases the likelihood that
the Fund will lose money, due to more limited information about the issuer
and/or the security; higher brokerage costs; different accounting,
auditing and financial reporting standards; less developed legal systems
and thinner trading markets; the possibility of currency blockages or
transfer restrictions; an emerging market country’s dependence on revenue
from particular commodities or international aid; and expropriation,
nationalization or other adverse political or economic
developments. |
• |
financial
services risk: the risk that an investment in issuers in the
financial services sector or transactions with one or more counterparties
in the financial services sector may be adversely affected by, among other
things: (i) changes in governmental regulation, which may limit both the
amounts and the types of loans and other financial commitments financial
services companies can make, the interest rates and fees they can charge,
the scope of their activities, the prices they can charge and the amount
of capital they must maintain; (ii) fluctuations, including as a
result of interest rate changes or increased competition, in the
availability and cost of capital funds on which the profitability of
financial services |
companies
is largely dependent; (iii) deterioration of the credit markets;
(iv) credit losses resulting from financial difficulties of
borrowers, especially when financial services companies are exposed to
non‑diversified or concentrated loan portfolios; (v) financial losses
associated with investment activities, especially when financial services
companies are exposed to financial leverage; (vi) the risk that any
financial services company experiences substantial declines in the
valuations of its assets, takes action to raise capital, or ceases
operations; (vii) the risk that a market shock or other unexpected
market, economic, political, regulatory, or other event might lead to a
sudden decline in the values of most or all companies in the financial
services sector; (viii) events leading to limited liquidity,
defaults, non‑performance or other adverse developments that affect
financial institutions or the financial services industry generally, or
concerns or rumors about any events of these kinds or other similar risks,
leading to market-wide liquidity problems; and (ix) the
interconnectedness or interdependence among financial services companies,
including the risk that the financial distress or failure of one financial
services company may materially and adversely affect a number of other
financial services companies. |
• |
foreign
currency risk: the risk that fluctuations in exchange rates
may adversely affect the value of the Fund’s investments denominated in
foreign currencies. |
• |
foreign
investing risk: the risk that investments in foreign
securities or in issuers with significant exposure to foreign markets, as
compared to investments in U.S. securities or in issuers with
predominantly domestic market exposure, may be more vulnerable to
economic, political, and social instability and subject to less government
supervision, less protective custody practices, lack of transparency,
inadequate regulatory and accounting standards, delayed or infrequent
settlement of transactions, and foreign taxes. If the Fund buys securities
denominated in a foreign currency, receives income in foreign currencies,
or holds foreign currencies from time to time, the value of the Fund’s
assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Foreign markets are also subject to the risk that a foreign
government could restrict foreign exchange transactions or otherwise
implement unfavorable currency regulations. In addition, foreign
securities may be subject to currency exchange rates or regulations, the
imposition of economic sanctions, tariffs or other government
restrictions, higher transaction and other costs, reduced liquidity, and
delays in settlement. |
• |
high yield
risk: the risk that debt instruments rated below investment
grade or debt instruments that are unrated and of comparable or lesser
quality are predominantly speculative. These instruments, commonly known
as “junk bonds,” have a higher degree of default risk and may be less
liquid than higher-rated bonds. These instruments may be subject to
greater price volatility due to such factors as specific corporate
developments, interest rate sensitivity, negative perceptions of high
yield investments generally, and less secondary market
liquidity. |
• |
leveraging
risk: the risk that certain investments by the Fund
involving leverage may have the effect of increasing the volatility of the
value of the Fund’s portfolio, and the risk of loss in excess of invested
capital. |
• |
liquidity risk:
the risk that the Fund may be unable to sell a portfolio
investment at a desirable time or at the value the Fund has placed on the
investment. Illiquidity may be the result of, for example, low trading
volume, lack of a market maker, or contractual or legal restrictions that
limit or prevent the Fund from selling securities or closing derivative
positions. During periods of substantial market disruption, a large
portion of the Fund’s assets could potentially experience significant
levels of illiquidity. The values of illiquid investments are often more
volatile than the values of more liquid investments. It may be more
difficult for the Fund to determine a fair value of an illiquid investment
than that of a more liquid comparable
investment. |
• |
market risk:
the risk that markets will perform poorly or that the
returns from the securities in which the Fund invests will underperform
returns from the general securities markets or other types of investments.
Markets may, in response to governmental actions or intervention or
general market conditions, including real or perceived adverse political,
economic or market conditions, tariffs and trade disruptions, inflation,
recession, changes in interest or currency rates, lack of liquidity in the
bond markets or adverse investor sentiment, or other external factors,
experience periods of high volatility and reduced liquidity. During those
periods, the Fund may experience high levels of shareholder redemptions,
and may have to sell securities at times when the Fund would otherwise not
do so, and potentially at unfavorable prices. Certain securities may be
difficult to value during such periods. Market risk involves the risk that
the value of the Fund’s investment portfolio will change, potentially
frequently and in large amounts, as the prices of its investments go up or
down. During periods of severe market stress, it is possible that the
market for some or all of a Fund’s investments may become highly illiquid.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. Please see “debt securities
risks — interest rate risk” herein for more
information. |
• |
operational and
information security risks: an investment in the Fund, like
any fund, can involve operational risks arising from factors such as
processing errors, human errors, inadequate or failed internal or external
processes, failures in systems and technology, changes in personnel and
errors caused by third-party service providers. The occurrence of any of
these failures, errors or breaches could result in investment losses to
the Fund, a loss of information, regulatory scrutiny, reputational damage
or other events, any of which could have a material adverse effect on the
Fund. While the Fund seeks to minimize such events through controls and
oversight, there may still be failures that could cause losses to the
Fund. |
• |
restricted
securities risk: the risk that the Fund may be prevented or
limited by law or the terms of an agreement from selling a security (a
“restricted security”). To the
extent that the Fund is permitted to sell a restricted security, there can
be no assurance that a trading market will exist at any particular time,
and the Fund may be unable to dispose of the security promptly at
reasonable prices or at all. The Fund may have to bear the expense of
registering the securities for resale and the risk of substantial delays
in effecting the registration. Also, restricted securities may be
difficult to value because market quotations may not be readily available,
and the values of restricted securities may have significant
volatility. |
• |
securities or
sector selection risk: the risk that the securities held by
the Fund will underperform securities held in other funds investing in
similar asset classes or comparable benchmarks because of the portfolio
managers’ choice of securities or sectors for investment. To the extent
the Fund allocates a higher percentage of its investment portfolio to a
particular sector or related sectors, the Fund will be more susceptible to
events or factors affecting companies in that sector or related sectors.
For example, the values of securities of companies in the same or related
sectors may be negatively affected by the common characteristics they
share, the common business risks to which they are subject, common
regulatory burdens, or regulatory changes that affect them similarly. Such
characteristics, risks, burdens or changes include, but are not limited
to, changes in governmental regulation, inflation or deflation, rising or
falling interest rates, competition from new entrants, and other economic,
market, political or other developments specific to that sector or related
sectors. |
• |
sovereign debt
obligations risk: the risk that investments in debt
obligations of sovereign governments may lose value due to the government
entity’s unwillingness or inability to repay principal and interest when
due in accordance with the terms of the debt or otherwise in a timely
manner. Sovereign governments may default on their debt obligations for a
number of reasons, including social, political, economic and diplomatic
changes in countries issuing sovereign debt. The Fund may have limited (or
no) recourse in the event of a default because bankruptcy, moratorium and
other similar laws applicable to issuers of sovereign debt obligations may
be substantially different from those applicable to private issuers, and
any recourse may be subject to the political climate in the relevant
country. In addition, foreign governmental entities may enjoy various
levels of sovereign immunity, and it may be difficult or impossible to
bring a legal action against a foreign governmental entity or to enforce a
judgment against such an entity. Holders of certain foreign government
debt securities may be requested to participate in the restructuring of
such obligations and to extend further loans to their issuers. There can
be no assurance that the foreign government debt securities in which the
Fund may invest will not be subject to similar restructuring arrangements
or to requests for new credit, which may adversely affect the Fund’s
holdings. |
• |
structured
products and structured notes risk: the risk that an
investment in a structured product, which includes, among other things,
collateralized debt obligations, mortgage-backed securities, other types
of asset-backed securities and certain types of structured notes, may
decline in value due to changes in the underlying instruments, indexes,
interest rates or other factors on which the product is based (“reference measure”). Depending on the reference
measure used and the use of multipliers or deflators (if any), changes in
interest rates and movement of the reference measure may cause significant
price and cash flow fluctuations. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique.
Holders of structured products indirectly bear risks associated with the
reference measure, are subject to counterparty risk and typically do not
have direct rights against the reference measure. Structured products are
generally privately offered and sold, and thus, are not registered under
the securities laws and may be thinly traded or have a limited trading
market and may have the effect of increasing the Fund’s illiquidity,
reducing the Fund’s income and the value of the investment. At a
particular point in time, the Fund may be unable to find qualified buyers
for these securities. Investments in structured notes involve risks
including interest rate risk, credit risk and market
risk. |
• |
valuation
risk: the risk that the Fund will not value its investments
in a manner that accurately reflects their market values or that the Fund
will not be able to sell any investment at a price equal to the valuation
ascribed to that investment for purposes of calculating the Fund’s net
asset value (“NAV”). The valuation
of the Fund’s investments involves subjective judgment. Certain securities
in which the Fund may invest may be more difficult to value accurately,
especially during periods of market disruptions or extreme market
volatility. Incorrect valuations of the Fund’s portfolio holdings could
result in the Fund’s shareholder transactions being effected at an NAV
that does not accurately reflect the underlying value of the Fund’s
portfolio, resulting in the dilution of shareholder
interests. |
|
Quarter
ended | |||
- |
Quarter
ended |
One Year | Five Years | Ten Years |
Since Inception
( | |||||||||||||||||
Class I | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Return
After Taxes on Distributions |
||||||||||||||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
||||||||||||||||||||
Class N |
| |||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
J.P. Morgan Emerging Markets Bond Global Diversified Index (reflects no deduction for fees, expenses or taxes) |
Name |
Experience
with
the
Fund |
Primary Title with the
Investment
Adviser | ||
Luz M. Padilla | Since the Fund’s inception in April 2010 | Portfolio Manager | ||
Su Fei Koo | Since December 2015 | Portfolio Manager | ||
Mark W. Christensen | Since December 2015 | Portfolio Manager |
Minimum Initial Investment: | Subsequent Investment: |
|||||||||||
Regular Accounts |
IRAs/HSAs |
All Accounts and
Automatic
Investment Plans |
||||||||||
Class I Shares | $ | 100,000 | $ | 5,000 | $ | 100 | ||||||
Class N Shares | $ | 2,000 | $ | 500 | $ | 100 |
Share Class | Class I | Class N | Class R6 | |||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) | ||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the original purchase price) | ||||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||||
Redemption Fee (as a percentage of shares redeemed within 90 days of purchase) | ||||||
Fee for Redemption by Wire | $ |
$ |
$ | |||
Exchange Fee | ||||||
Account Fee |
Share Class | Class I | Class N | Class R6 | |||||||||
Management Fees | ||||||||||||
Distribution and/or Service (12b‑1) Fees | ||||||||||||
Other Expenses (includes sub‑transfer agent accounting or administrative services expenses) | ||||||||||||
Acquired Fund Fees and Expenses1 | ||||||||||||
Total Annual Fund Operating Expenses |
1 |
Class I | Class N | Class R6 | ||||
1 Year | $ |
$ |
$ | |||
3 Years | $ |
$ |
$ | |||
5 Years | $ |
$ |
$ | |||
10 Years | $ |
$ |
$ |
• |
active
management risk: the risk that the Fund will fail to meet
its investment objective and that the Fund’s investment performance will
depend, at least in part, on how its assets are allocated and reallocated
among asset classes, sectors, underlying funds and/or investments and that
such allocation will focus on asset classes, sectors, underlying funds,
and/or investments that perform poorly or underperform other asset
classes, sectors, underlying funds, and/or available investments. Any
given investment strategy may fail to produce the intended results, and
the Fund’s portfolio may underperform other comparable funds because of
portfolio management decisions related to, among other things, the
selection of investments, portfolio construction, risk assessments, and/or
the outlook on market trends and
opportunities. |
• |
asset-backed
securities investment risk: the risk that borrowers may
default on the obligations that underlie the asset-backed security and
that, during periods of falling interest rates, asset-backed securities
may be called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate, and the risk that
the impairment of the value of the collateral underlying a security in
which the Fund invests (due, for example, to non‑payment of loans) will
result in a reduction in the value of the
security. |
• |
collateralized
debt obligations risk: the risks of an investment in a
collateralized debt obligation (“CDO”) depend largely on the quality and
type of the collateral and the tranche of the CDO in which the Fund
invests. Normally, collateralized bond obligations, CLOs and other CDOs
are privately offered and sold, and thus are not registered under the
securities laws. As a result, investments in CDOs may be illiquid. In
addition to the risks associated with debt instruments (e.g., interest rate risk and credit
risk), CDOs carry additional risks including, but not limited to:
(i) the possibility that distributions from
collateral |
will
not be adequate to make interest or other payments; (ii) the quality
of the collateral may decline in value or default; (iii) the
possibility that the Fund may invest in CDOs that are subordinate to other
classes of the issuer’s securities; and (iv) the complex structure of
the security may not be fully understood at the time of investment and may
produce disputes with the issuer or unexpected investment
results. |
• |
counterparty
risk: the risk that the Fund will be subject to credit risk
with respect to the counterparties to the derivative contracts and other
instruments entered into by the Fund; that the Fund’s counterparty will be
unable or unwilling to perform its obligations; that the Fund will be
unable to enforce contractual remedies if its counterparty defaults; that
if a counterparty (or an affiliate of a counterparty) becomes bankrupt,
the Fund may experience significant delays in obtaining any recovery or
may obtain limited or no recovery in a bankruptcy or other insolvency
proceeding. To the extent that the Fund enters into multiple transactions
with a single or a small set of counterparties, it will be subject to
increased counterparty risk. |
• |
debt securities
risks: |
¡ |
credit risk:
the risk that an issuer, counterparty or other obligor to
the Fund will fail to pay its obligations to the Fund when they are due,
which may reduce the Fund’s income and/or reduce, in whole or in part, the
value of the Fund’s investment. Actual or perceived changes in the
financial condition of an obligor, changes in economic, social or
political conditions that affect a particular type of security,
instrument, or obligor, and changes in economic, social or political
conditions generally can increase the risk of default by an obligor, which
can affect a security’s or other instrument’s credit quality or value and
an obligor’s ability to honor its obligations when due. The values of
lower-quality debt securities (including debt securities commonly known as
“high yield” securities or “junk bonds”), including floating rate loans,
tend to be particularly sensitive to these changes. Certain debt
securities in the lowest investment grade category also may be considered
to possess some speculative characteristics by certain rating agencies.
The values of securities or instruments also may decline for a number of
other reasons that relate directly to the obligor, such as management
performance, financial leverage, and reduced demand for the obligor’s
goods and services, as well as the historical and prospective earnings of
the obligor and the value of its
assets. |
¡ |
extension risk:
the risk that if interest rates rise, repayments of
principal on certain debt securities, including, but not limited to,
floating rate loans and mortgage-related securities, may occur at a slower
rate than expected and the expected maturity of those securities could
lengthen as a result. Securities that are subject to extension risk
generally have a greater potential for loss when prevailing interest rates
rise, which could cause their values to fall
sharply. |
¡ |
interest rate
risk: the risk that debt instruments will change in value
because of changes in interest rates. The value of an instrument with a
longer duration (whether positive or negative) will be more sensitive to
changes in interest rates than a similar instrument with a shorter
duration. Bonds and other debt instruments typically have a positive
duration. The value of a debt instrument with positive duration will
generally decline if interest rates increase. Certain other investments,
such as inverse floaters and certain derivative instruments, may have a
negative duration. The value of instruments with a negative duration will
generally decline if interest rates decrease. Inverse floaters,
interest-only and principal-only securities are especially sensitive to
interest rate changes, which can affect not only their prices but can also
change the income flows and repayment assumptions about those investments.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. The risks associated with
rising interest rates are heightened under current market conditions given
that the U.S. Federal Reserve has raised interest rates from historically
low levels and may continue to do so. Fiscal, economic, monetary or other
government policies or measures have in the past, and may in the future,
cause or exacerbate risks associated with interest rates, including
changes in interest rates. Further, in market environments where interest
rates are rising, issuers may be less willing or able to make principal
and interest payments on fixed-income investments when
due. |
¡ |
prepayment
risk: the risk that the issuer of a debt security, including
floating rate loans and mortgage-related securities, repays all or a
portion of the principal prior to the security’s maturity. In times of
declining interest rates, there is a greater likelihood that the Fund’s
higher yielding securities will be pre‑paid with the Fund being unable to
reinvest the proceeds in an investment with as great a yield. Prepayments
can therefore result in lower yields to shareholders of the
Fund. |
• |
defaulted
securities risk: the significant risk of the uncertainty of
repayment of defaulted securities (e.g., a security on which a principal or
interest payment is not made when due) and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant
default, in workout or restructuring or in bankruptcy or similar
proceedings). Such investments entail high risk and have speculative
characteristics. |
• |
derivatives
risk: the risk that an investment in derivatives will not
perform as anticipated by the Adviser, may not be available at the time or
price desired, cannot be closed out at a favorable time or price, will
increase the Fund’s transaction costs, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute for or alternative to a direct cash
investment, the transaction may not provide a return that corresponds
precisely or at all with that of the cash investment; that the positions
may be improperly executed or constructed; that the Fund’s counterparty
will be unable or unwilling to perform its obligations; or that, when used
for hedging purposes, derivatives will not provide the anticipated
protection, causing the Fund to lose money on both the derivatives
transaction and the exposure the Fund sought to
hedge. |
• |
emerging market
country risk: the risk that investing in emerging markets,
as compared to foreign developed markets, increases the likelihood that
the Fund will lose money, due to more limited information about the issuer
and/or the security; higher brokerage costs; different accounting,
auditing and financial reporting standards; less developed legal systems
and thinner trading markets; the possibility of currency blockages or
transfer restrictions; an emerging market country’s dependence on revenue
from particular commodities or international aid; and expropriation,
nationalization or other adverse political or economic
developments. |
• |
financial
services risk: the risk that an investment in issuers in the
financial services sector or transactions with one or more counterparties
in the financial services sector may be adversely affected by, among other
things: (i) changes in governmental regulation, which may limit both
the amounts and the types of loans and other financial commitments
financial services companies can make, the interest rates and fees they
can charge, the scope of their activities, the prices they can charge and
the amount of capital they must maintain; (ii) fluctuations,
including as a result of interest rate changes or increased competition,
in the availability and cost of capital funds on which the profitability
of financial services companies is largely dependent;
(iii) deterioration of the credit markets; (iv) credit losses
resulting from financial difficulties of borrowers, especially when
financial services companies are exposed to non‑diversified or
concentrated loan portfolios; (v) financial losses associated with
investment activities, especially when financial services companies are
exposed to financial leverage; (vi) the risk that any financial
services company experiences substantial declines in the valuations of its
assets, takes action to raise capital, or ceases operations;
(vii) the risk that a market shock or other unexpected market,
economic, political, regulatory, or other event might lead to a sudden
decline in the values of most or all companies in the financial services
sector; (viii) events leading to limited liquidity, defaults,
non‑performance or other adverse developments that affect financial
institutions or the financial services industry generally, or concerns or
rumors about any events of these kinds or other similar risks, leading to
market-wide liquidity problems; and (ix) the interconnectedness or
interdependence among financial services companies, including the risk
that the financial distress or failure of one financial services company
may materially and adversely affect a number of other financial services
companies. |
• |
foreign
currency risk: the risk that fluctuations in exchange rates
may adversely affect the value of the Fund’s investments denominated in
foreign currencies. |
• |
foreign
investing risk: the risk that investments in foreign
securities or in issuers with significant exposure to foreign markets, as
compared to investments in U.S. securities or in issuers with
predominantly domestic market exposure, may be more vulnerable to
economic, political, and social instability and subject to less government
supervision, less protective custody practices, lack of transparency,
inadequate regulatory and accounting standards, delayed or infrequent
settlement of transactions, and foreign taxes. If the Fund buys securities
denominated in a foreign currency, receives income in foreign currencies,
or holds foreign currencies from time to time, the value of the Fund’s
assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Foreign markets are also subject to the risk that a foreign
government could restrict foreign exchange transactions or otherwise
implement unfavorable currency regulations. In addition, foreign
securities may be subject to currency exchange rates or regulations, the
imposition of economic sanctions, tariffs or other government
restrictions, higher transaction and other costs, reduced liquidity, and
delays in settlement. |
• |
high yield
risk: the risk that debt instruments rated below investment
grade or debt instruments that are unrated and of comparable or lesser
quality are predominantly speculative. These instruments, commonly known
as “junk bonds,” have a higher degree of default risk and may be less
liquid than higher-rated bonds. These instruments may be subject to
greater price volatility due to such factors as specific corporate
developments, interest rate sensitivity, negative perceptions of high
yield investments generally, and less secondary market
liquidity. |
• |
inflation-indexed bond risk: the
risk that such bonds will change in value in response to actual or
anticipated changes in inflation rates in a manner unanticipated by the
Fund’s portfolio management team or investors generally. Inflation-indexed
bonds are subject to debt securities
risks. |
• |
investment
company and exchange-traded fund risk: the risk that an
investment company or other pooled investment vehicle, including any ETFs
or money market funds, in which the Fund invests will not achieve its
investment objective or execute its investment strategies effectively or
that significant purchase or redemption activity by shareholders of such
an investment company might negatively affect the value of its shares. The
Fund must pay its pro rata portion of an investment company’s fees and
expenses. To the extent the Adviser determines to invest Fund assets in
other investment companies, the Adviser will have an incentive to invest
in other DoubleLine funds over investment companies sponsored or managed
by others and to maintain such investments once made due to its own
financial interest in those products and other business
considerations. |
• |
leveraging
risk: the risk that certain investments by the Fund
involving leverage may have the effect of increasing the volatility of the
value of the Fund’s portfolio, and the risk of loss in excess of invested
capital. |
• |
liquidity risk:
the risk that the Fund may be unable to sell a portfolio
investment at a desirable time or at the value the Fund has placed on the
investment. Illiquidity may be the result of, for example, low trading
volume, lack of a market maker, or contractual or legal restrictions that
limit or prevent the Fund from selling securities or closing derivative
positions. During periods of substantial market disruption, a large
portion of the Fund’s assets could potentially experience significant
levels of illiquidity. The values of illiquid investments are often more
volatile than the values of more liquid investments. It may be more
difficult for the Fund to determine a fair value of an illiquid investment
than that of a more liquid comparable
investment. |
• |
loan
risk: the risk that (i) if the Fund holds a loan
through another financial intermediary, or relies on a financial
intermediary to administer the loan, its receipt of principal and interest
on the loan may be subject to the credit risk of that financial
intermediary; (ii) any collateral securing a loan may be insufficient
or unavailable to the Fund, because, for example, the value of the
collateral securing a loan can decline, be insufficient to meet the
obligations of the borrower, or be difficult to liquidate, and the Fund’s
rights to collateral may be limited by bankruptcy or insolvency laws;
(iii) investments in highly leveraged loans or loans of stressed,
distressed, or defaulted issuers may be subject to significant credit and
liquidity risk; (iv) a bankruptcy or other court proceeding could
delay or limit the ability of the Fund to collect the principal and
interest payments on that borrower’s loans or adversely affect the Fund’s
rights in collateral relating to a loan; (v) there may be limited
public information available regarding the loan and the relevant
borrower(s); (vi) the use of a particular interest rate benchmark may
limit the Fund’s ability to achieve a net return to shareholders that
consistently approximates the average published Prime Rate of U.S. banks;
(vii) the prices of certain floating rate loans that include a
feature that prevents their interest rates from adjusting if market
interest rates are below a specified minimum level may appreciate less
than other instruments in response to changes in interest rates should
interest rates rise but remain below the applicable minimum level;
(viii) if a borrower fails to comply with various restrictive
covenants that may be found in loan agreements, the borrower may default
in payment of the loan; (ix) if the Fund invests in loans that
contain fewer or less restrictive constraints on the borrower than certain
other types of loans (“covenant-lite” loans), it may have fewer rights
against the borrowers of such loans, including fewer protections against
the possibility of default and fewer remedies in the event of default;
(x) the loan is unsecured; (xi) there is a limited secondary
market; (xii) transactions in loans may settle on a delayed basis,
and the Fund may not receive the proceeds from the sale of a loan for a
substantial period of time after the sale, which may result in sale
proceeds related to the sale of loans not being available to make
additional investments or to meet the Fund’s redemption obligations until
potentially a substantial period after the sale of the loans; and
(xiii) loans may be difficult to value and may be illiquid, which may
adversely affect an investment in the Fund. The Fund may invest in loans
directly or indirectly by investing in shares of the DoubleLine Floating
Rate Fund and in either case will be subject to the risks described
above. |
• |
market risk:
the risk that markets will perform poorly or that the
returns from the securities in which the Fund invests will underperform
returns from the general securities markets or other types of investments.
Markets may, in response to governmental actions or intervention or
general market conditions, including real or perceived adverse political,
economic or market conditions, tariffs and trade disruptions, inflation,
recession, changes in interest or currency rates, lack of liquidity in the
bond markets or adverse investor sentiment, or other external factors,
experience periods of high volatility and reduced liquidity. During those
periods, the Fund may experience high levels of shareholder redemptions,
and may have to sell securities at times when the Fund would otherwise not
do so, and potentially at unfavorable prices. Certain securities may be
difficult to value during such periods. Market risk involves the risk that
the value of the Fund’s investment portfolio will change, potentially
frequently and in large amounts, as the prices of its investments go up or
down. During periods of severe market stress, it is possible that the
market for some or all of a Fund’s investments may become highly illiquid.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. Please see “debt securities
risks — interest rate risk” herein for more
information. |
• |
mortgage-backed
securities risk: the risk that borrowers may default on
their mortgage obligations or the guarantees underlying the
mortgage-backed securities will default or otherwise fail and that, during
periods of falling interest rates, mortgage-backed securities will be
called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate. During periods of
rising interest rates, the average life of a mortgage-backed security may
extend, which may lock in a below-market interest rate, increase the
security’s duration, and reduce the value of the security. Enforcing
rights against the underlying assets or collateral may be difficult, or
the underlying assets or collateral may be insufficient if the issuer
defaults. The values of certain types of mortgage-backed securities, such
as inverse floaters and interest-only and principal-only securities, may
be extremely sensitive to changes in interest rates and prepayment rates.
The Fund may invest in mortgage-backed securities that are subordinate in
their right to receive payment of interest and repayment of principal to
other classes of the issuer’s
securities. |
• |
operational and
information security risks: an investment in the Fund, like
any fund, can involve operational risks arising from factors such as
processing errors, human errors, inadequate or failed internal or external
processes, failures in systems and technology, changes in personnel and
errors caused by third-party service providers. The occurrence of any of
these failures, errors or breaches could result in investment losses to
the Fund, a loss of information, regulatory scrutiny, reputational damage
or other events, any of which could have a material adverse effect on the
Fund. While the Fund seeks to minimize such events through controls and
oversight, there may still be failures that could cause losses to the
Fund. |
• |
real estate
sector risk: the risk that real estate-related investments
may decline in value as a result of factors affecting the real estate
sector, such as the supply of real property in certain markets, changes in
zoning laws, delays in completion of construction, changes in real estate
values, changes in property taxes, levels of occupancy, and local,
regional, and general market conditions. Along with the risks common to
different types of real estate-related investments, real estate investment
trusts (“REITs”), no matter the
type, involve additional risk factors, including poor performance by the
REIT’s manager, adverse changes to the tax laws, and the possible failure
by the REIT to qualify for the favorable tax treatment available to REITs
under the Internal Revenue Code of 1986, as amended, or the exemption from
registration under the Investment Company Act of 1940, as amended. REITs
are not diversified and are heavily dependent on cash flow earned on the
property interests they hold. |
• |
restricted
securities risk: the risk that the Fund may be prevented or
limited by law or the terms of an agreement from selling a security (a
“restricted security”). To the
extent that the Fund is permitted to sell a restricted security, there can
be no assurance that a trading market will exist at any particular time,
and the Fund may be unable to dispose of the security promptly at
reasonable prices or at all. The Fund may have to bear the expense of
registering the securities for resale and the risk of substantial delays
in effecting the registration. Also, restricted securities may be
difficult to value because market quotations may not be readily available,
and the values of restricted securities may have significant
volatility. |
• |
securities or
sector selection risk: the risk that the securities held by
the Fund will underperform securities held in other funds investing in
similar asset classes or comparable benchmarks because of the portfolio
managers’ choice of securities or sectors for investment. To the extent
the Fund allocates a higher percentage of its investment portfolio to a
particular sector or related sectors, the Fund will be more susceptible to
events or factors affecting companies in that sector or related sectors.
For example, the values of securities of companies in the same or related
sectors may be negatively affected by the common characteristics they
share, the common business risks to which they are subject, common
regulatory burdens, or regulatory changes that affect them similarly. Such
characteristics, risks, burdens or changes include, but are not limited
to, changes in governmental regulation, inflation or deflation, rising or
falling interest rates, competition from new entrants, and other economic,
market, political or other developments specific to that sector or related
sectors. |
• |
structured
products and structured notes risk: the risk that an
investment in a structured product, which includes, among other things,
CDOs, mortgage-backed securities, other types of asset-backed securities
and certain types of structured notes, may decline in value due to changes
in the underlying instruments, indexes, interest rates or other factors on
which the product is based (“reference measure”). Depending on the reference
measure used and the use of multipliers or deflators (if any), changes in
interest rates and movement of the reference measure may cause significant
price and cash flow fluctuations. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique.
Holders of structured products indirectly bear risks associated with the
reference measure, are subject to counterparty risk and typically do not
have direct rights against the reference measure. Structured products are
generally privately offered and sold, and thus, are not registered under
the securities laws and may be thinly traded or have a limited trading
market and may have the effect of increasing the Fund’s illiquidity,
reducing the Fund’s income and the value of the investment. At a
particular point in time, the Fund may be unable to find qualified buyers
for these securities. Investments in structured notes involve risks
including interest rate risk, credit risk and market
risk. |
• |
U.S. Government
securities risk: the risk that debt securities issued or
guaranteed by certain U.S. Government agencies, instrumentalities, and
sponsored enterprises are not supported by the full faith and credit of
the U.S. Government, and so investments in their securities or obligations
issued by them involve credit risk greater than investments in other types
of U.S. Government securities. |
• |
valuation
risk: the risk that the Fund will not value its investments
in a manner that accurately reflects their market values or that the Fund
will not be able to sell any investment at a price equal to the valuation
ascribed to that investment for purposes of calculating the Fund’s net
asset value (“NAV”). The valuation
of the Fund’s investments involves subjective judgment. Certain securities
in which the Fund may invest may be more difficult to value accurately,
especially during periods of market disruptions or extreme market
volatility. Incorrect valuations of the Fund’s portfolio holdings could
result in the Fund’s shareholder transactions being effected at an NAV
that does not accurately reflect the underlying value of the Fund’s
portfolio, resulting in the dilution of shareholder
interests. |
|
Quarter
ended | |||
- |
Quarter
ended |
One Year | Five Years | Ten Years |
Since Inception
( | |||||||||||||||||
Class I | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Return
After Taxes on Distributions |
||||||||||||||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
||||||||||||||||||||
Class N | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Class R61 | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
ICE
BofA 1‑3 Year U.S. Treasury Index
(reflects no deduction for fees, expenses or
taxes) |
||||||||||||||||||||
Bloomberg U.S. Aggregate 1‑3 Years Index (reflects no deduction for fees, expenses or taxes) |
1 | Class R6
shares were not available for purchase until July 31, 2019. The
performance shown for Class R6 shares prior to that date is that of
the Class I shares of the Fund, another class of the Fund that is
invested in the same portfolio of securities as Class R6 shares.
Annual returns of Class R6 shares would have differed from that shown
for the period prior to July 31, 2019 only to the extent that
Class R6 shares and Class I shares have different
expenses. |
Name |
Experience
with
the
Fund |
Primary
Title with the
Investment
Adviser | ||
Luz M. Padilla | Since the Fund’s inception in September 2011 | Portfolio Manager | ||
Robert Cohen | Since September 2016 | Director of Global Developed Credit | ||
Jeffrey E. Gundlach | Since July 2019 | Chief Executive Officer | ||
Jeffrey J. Sherman | Since July 2019 | Deputy Chief Investment Officer |
Minimum Initial Investment: | Subsequent Investment: |
|||||||||||
Regular Accounts |
IRAs/HSAs |
All Accounts
and
Automatic
Investment Plans |
||||||||||
Class I Shares | $ | 100,000 | $ | 5,000 | $ | 100 | ||||||
Class N Shares | $ | 2,000 | $ | 500 | $ | 100 | ||||||
Class R6 Shares | None* | N/A | N/A |
* |
See
eligibility limitations below. |
Share Class | Class I | Class N | ||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) | ||||
Maximum Deferred Sales Charge (Load) (as a percentage of the original purchase price) | ||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||
Redemption Fee (as a percentage of amount redeemed on shares held for 90 days or less) | ||||
Fee for Redemption by Wire | $ |
$ | ||
Exchange Fee | ||||
Account Fee |
Share Class | Class I | Class N | ||||||
Management Fees | ||||||||
Distribution and/or Service (12b‑1) Fees | ||||||||
Other Expenses (includes sub‑transfer agent accounting or administrative services expenses) | ||||||||
Acquired Fund Fees and Expenses1 | ||||||||
Total Annual Fund Operating Expenses |
1 |
Class I | Class N | |||
1 Year | $ |
$ | ||
3 Years | $ |
$ | ||
5 Years | $ |
$ | ||
10 Years | $ |
$ |
• |
active
management risk: the risk that the Fund will fail to meet
its investment objective and that the Fund’s investment performance will
depend, at least in part, on how its assets are allocated and reallocated
among asset classes, sectors, underlying funds and/or investments and that
such allocation will focus on asset classes, sectors, underlying funds,
and/or investments that perform poorly or underperform other asset
classes, sectors, underlying funds, and/or available investments. Any
given investment strategy may fail to produce the intended results, and
the Fund’s portfolio may underperform other comparable funds because of
portfolio management decisions related to, among other things, the
selection of investments, portfolio construction, risk assessments, and/or
the outlook on market trends and
opportunities. |
• |
asset-backed
securities investment risk: the risk that borrowers may
default on the obligations that underlie the asset-backed security and
that, during periods of falling interest rates, asset-backed securities
may be called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate, and the risk that
the impairment of the value of the collateral underlying a security in
which the Fund invests (due, for example, to non‑payment of loans) will
result in a reduction in the value of the
security. |
• |
collateralized
debt obligations risk: the risks of an investment in a CDO
depend largely on the quality and type of the collateral and the tranche
of the CDO in which the Fund invests. Normally, collateralized bond
obligations, CLOs and other CDOs are privately offered and sold, and thus
are not registered under the securities laws. As a result, investments in
CDOs may be illiquid. In addition to the risks associated with debt
instruments (e.g., interest rate
risk and credit risk), CDOs carry additional risks including, but not
limited to: (i) the possibility that distributions from collateral
will not be adequate to make interest or other payments; (ii) the
quality of the collateral may decline in value or default; (iii) the
possibility that the Fund may invest in CDOs that are subordinate to other
classes of the issuer’s securities; and (iv) the complex structure of
the security may not be fully understood at the time of investment and may
produce disputes with the issuer or unexpected investment
results. |
• |
confidential
information access risk: the risk that the intentional or
unintentional receipt of material, non‑public information (“Confidential Information”) by the Adviser
could limit the Fund’s ability to sell certain investments held by the
Fund or pursue certain investment opportunities on behalf of the Fund,
potentially for a substantial period of time. Also, certain issuers of
floating rate loans or other investments may not have any publicly traded
securities (“Private Issuers”) and
may offer private information pursuant to confidentiality agreements or
similar arrangements. The Adviser may access such private information,
while recognizing that the receipt of that information could potentially
limit the Fund’s ability to trade in certain securities, including if the
Private Issuer later issues publicly traded securities. In addition, in
circumstances when the Adviser declines to receive Confidential
Information from issuers of floating rate loans or other investments, the
Fund may be disadvantaged in comparison to other investors, including with
respect to evaluating the issuer and the price the Fund would pay or
receive when it buys or sells those investments, and the Fund may not take
advantage of investment opportunities that it otherwise might have if it
had received such Confidential Information. In managing the Fund, the
Adviser may seek to avoid the receipt of Confidential Information about
the issuers of floating rate loans or other investments being considered
for acquisition by the Fund or held in the Fund’s portfolio if the receipt
of the Confidential Information would restrict one or more of the
Adviser’s clients, including, potentially, the Fund, from trading in
securities they hold or in which they may
invest. |
• |
counterparty
risk: the risk that the Fund will be subject to credit risk
with respect to the counterparties to the derivative contracts and other
instruments entered into by the Fund; that the Fund’s counterparty will be
unable or unwilling to perform its obligations; that the Fund will be
unable to enforce contractual remedies if its counterparty defaults; that
if a counterparty (or an affiliate of a counterparty) becomes bankrupt,
the Fund may experience significant delays in obtaining any recovery or
may obtain limited or no recovery in a bankruptcy or other insolvency
proceeding. To the extent that the Fund enters into multiple transactions
with a single or a small set of counterparties, it will be subject to
increased counterparty risk. |
• |
debt securities
risks: |
¡ |
credit risk:
the risk that an issuer, counterparty or other obligor to
the Fund will fail to pay its obligations to the Fund when they are due,
which may reduce the Fund’s income and/or reduce, in whole or in part, the
value of the Fund’s investment. Actual or perceived changes in the
financial condition of an obligor, changes in economic, social or
political conditions that affect a particular type of security,
instrument, or obligor, and changes in economic, social or political
conditions generally can increase the risk of default by an obligor, which
can affect a security’s or other instrument’s credit quality or value and
an obligor’s ability to honor its obligations when due. The values of
lower-quality debt securities (including debt securities commonly known as
“high yield” securities or “junk bonds”), including floating rate loans,
tend to be particularly sensitive to these changes. Certain debt
securities in the lowest investment grade category also may be considered
to possess some speculative characteristics by certain rating agencies.
The values of securities or instruments also may decline for a number of
other reasons that relate directly to the obligor, such as management
performance, financial leverage, and reduced demand for the obligor’s
goods and services, as well as the historical and prospective earnings of
the obligor and the value of its
assets. |
¡ |
extension risk:
the risk that if interest rates rise, repayments of
principal on certain debt securities, including, but not limited to,
floating rate loans and mortgage-related securities, may occur at a slower
rate than expected and the expected maturity of those securities could
lengthen as a result. Securities that are subject to extension risk
generally have a greater potential for loss when prevailing interest rates
rise, which could cause their values to fall
sharply. |
¡ |
interest rate
risk: the risk that debt instruments will change in value
because of changes in interest rates. The value of an instrument with a
longer duration (whether positive or negative) will be more sensitive to
changes in interest rates than a similar instrument with a shorter
duration. Bonds and other debt instruments typically have a positive
duration. The value of a debt instrument with positive duration will
generally decline if interest rates increase. Certain other investments,
such as inverse floaters and certain derivative instruments, may have a
negative duration. The value of instruments with a negative duration will
generally decline if interest rates decrease. Inverse floaters,
interest-only and principal-only securities are especially sensitive to
interest rate changes, which can affect not only their prices but can also
change the income flows and repayment assumptions about those investments.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. The risks associated with
rising interest rates are heightened under current market conditions given
that the U.S. Federal Reserve has raised interest rates from historically
low levels and may continue to do so. Fiscal, economic, monetary or other
government policies or measures have in the past, and may in the future,
cause or exacerbate risks associated with interest rates, including
changes in interest rates. Further, in market environments where interest
rates are rising, issuers may be less willing or able to make principal
and interest payments on fixed-income investments when
due. |
¡ |
prepayment
risk: the risk that the issuer of a debt security, including
floating rate loans and mortgage-related securities, repays all or a
portion of the principal prior to the security’s maturity. In times of
declining interest rates, there is a greater likelihood that the Fund’s
higher yielding securities will be pre‑paid with the Fund being unable to
reinvest the proceeds in an investment with as great a yield. Prepayments
can therefore result in lower yields to shareholders of the
Fund. |
• |
defaulted
securities risk: the significant risk of the uncertainty of
repayment of defaulted securities (e.g., a security on which a principal or
interest payment is not made when due) and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant
default, in workout or restructuring or in bankruptcy or similar
proceedings). Such investments entail high risk and have speculative
characteristics. |
• |
derivatives
risk: the risk that an investment in derivatives will not
perform as anticipated by the Adviser, may not be available at the time or
price desired, cannot be closed out at a favorable time or price, will
increase the Fund’s transaction costs, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute for or alternative to a direct cash
investment, the transaction may not provide a return that corresponds
precisely or at all with that of the cash investment; that the positions
may be improperly executed or constructed; that the Fund’s counterparty
will be unable or unwilling to perform its obligations; or that, when used
for hedging purposes, derivatives will not provide the anticipated
protection, causing the Fund to lose money on both the derivatives
transaction and the exposure the Fund sought to
hedge. |
• |
emerging market
country risk: the risk that investing in emerging markets,
as compared to foreign developed markets, increases the likelihood that
the Fund will lose money, due to more limited information about the issuer
and/or the security; higher brokerage costs; different accounting,
auditing and financial reporting standards; less developed legal systems
and thinner trading markets; the possibility of currency blockages or
transfer restrictions; an emerging market country’s dependence on revenue
from particular commodities or international aid; and expropriation,
nationalization or other adverse political or economic
developments. |
• |
financial
services risk: the risk that an investment in issuers in the
financial services sector or transactions with one or more counterparties
in the financial services sector may be adversely affected by, among other
things: (i) changes in governmental regulation, which may limit both
the amounts and the types of loans and other financial commitments
financial services companies can make, the interest rates and fees they
can charge, the scope of their activities, the prices they can charge and
the amount of capital they must maintain; (ii) fluctuations,
including as a result of interest rate changes or increased competition,
in the availability and cost of capital funds on which the profitability
of financial services companies is largely dependent;
(iii) deterioration of the credit markets; (iv) credit losses
resulting from financial difficulties of borrowers, especially when
financial services companies are exposed to non‑diversified or
concentrated loan portfolios; (v) financial losses associated with
investment activities, especially when financial services companies are
exposed to financial leverage; (vi) the risk that any financial
services company experiences substantial declines in the valuations of its
assets, takes action to raise capital, or ceases operations;
(vii) the risk that a market shock or other unexpected market,
economic, political, regulatory, or other event might lead to a sudden
decline in the values of most or all companies in the financial services
sector; (viii) events leading to limited liquidity, defaults,
non‑performance or other adverse developments that affect financial
institutions or the financial services industry generally, or concerns or
rumors about any events of these kinds or other similar risks, leading to
market-wide liquidity problems; and (ix) the interconnectedness or
interdependence among financial services companies, including the risk
that the financial distress or failure of one financial services company
may materially and adversely affect a number of other financial services
companies. |
• |
focused
investment risk: the risk that a fund that invests a
substantial portion of its assets in a particular market, industry,
sector, group of industries or sectors, country, region, group of
countries or asset class is, relative to a fund that invests in a more
diverse investment portfolio, more susceptible to any single economic,
market, political, regulatory or other occurrence. This is because, for
example, issuers in a particular market, industry, region, sector or asset
class may react similarly to specific economic, market, regulatory,
political or other developments. The particular markets, industries,
regions, sectors or asset classes in which the Fund may focus its
investments may change over time and the Fund may alter its focus at
inopportune times. |
• |
foreign
currency risk: the risk that fluctuations in exchange rates
may adversely affect the value of the Fund’s investments denominated in
foreign currencies. |
• |
foreign
investing risk: the risk that investments in foreign
securities or in issuers with significant exposure to foreign markets, as
compared to investments in U.S. securities or in issuers with
predominantly domestic market exposure, may be more vulnerable to
economic, political, and social instability and subject to less government
supervision, less protective custody practices, lack of transparency,
inadequate regulatory and accounting standards, delayed or infrequent
settlement of transactions, and foreign taxes. If the Fund buys securities
denominated in a foreign currency, receives income in foreign currencies,
or holds foreign currencies from time to time, the value of the Fund’s
assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Foreign markets are also subject to the risk that a foreign
government could restrict foreign exchange transactions or otherwise
implement unfavorable currency regulations. In addition, foreign
securities may be subject to currency exchange rates or regulations, the
imposition of economic sanctions, tariffs or other government
restrictions, higher transaction and other costs, reduced liquidity, and
delays in settlement. |
• |
high yield
risk: the risk that debt instruments rated below investment
grade or debt instruments that are unrated and of comparable or lesser
quality are predominantly speculative. These instruments, commonly known
as “junk bonds,” have a higher degree of default risk and may be less
liquid than higher-rated bonds. These instruments may be subject to
greater price volatility due to such factors as specific corporate
developments, interest rate sensitivity, negative perceptions of high
yield investments generally, and less secondary market
liquidity. |
• |
inflation-indexed bond risk: the
risk that such bonds will change in value in response to actual or
anticipated changes in inflation rates in a manner unanticipated by the
Fund’s portfolio management team or investors generally. Inflation-indexed
bonds are subject to debt securities
risks. |
• |
investment
company and exchange-traded fund risk: the risk that an
investment company or other pooled investment vehicle, including any ETFs
or money market funds, in which the Fund invests will not achieve its
investment objective or execute its investment strategies effectively or
that significant purchase or redemption activity by shareholders of such
an investment company might negatively affect the value of its shares. The
Fund must pay its pro rata portion of an investment company’s fees and
expenses. To the extent the Adviser determines to invest Fund assets in
other investment companies, the Adviser will have an incentive to invest
in other investment vehicles sponsored or advised by the Adviser or a
related party of the Adviser over investment companies sponsored or
managed by others and to maintain such investments once made due to its
own financial interest in those products and other business
considerations. |
• |
large
shareholder risk: the risk that certain account holders,
including the Adviser or funds or accounts over which the Adviser (or
related parties of the Adviser) has investment discretion, may from time
to time own or control a significant percentage of the Fund’s shares. The
Fund is subject to the risk that a redemption by those shareholders of all
or a portion of their Fund shares, including as a result of an asset
allocation decision made by the Adviser (or related parties of the
Adviser), will adversely affect the Fund’s performance if it is forced to
sell portfolio securities or invest cash when the Adviser would not
otherwise choose to do so. Redemptions of a large number of shares may
affect the liquidity of the Fund’s portfolio, increase the Fund’s
transaction costs, and accelerate the realization of taxable income and/or
gains to shareholders. |
• |
leveraging
risk: the risk that certain investments by the Fund
involving leverage may have the effect of increasing the volatility of the
value of the Fund’s portfolio, and the risk of loss in excess of invested
capital. |
• |
liquidity risk:
the risk that the Fund may be unable to sell a portfolio
investment at a desirable time or at the value the Fund has placed on the
investment. Illiquidity may be the result of, for example, low trading
volume, lack of a market maker, or contractual or legal restrictions that
limit or prevent the Fund from selling securities or closing derivative
positions. During periods of substantial market disruption, a large
portion of the Fund’s assets could potentially experience significant
levels of illiquidity. The values of illiquid investments are often more
volatile than the values of more liquid investments. It may be more
difficult for the Fund to determine a fair value of an illiquid investment
than that of a more liquid comparable
investment. |
• |
loan
risk: the risk that (i) if the Fund holds a loan
through another financial intermediary, or relies on a financial
intermediary to administer the loan, its receipt of principal and interest
on the loan may be subject to the credit risk of that financial
intermediary; (ii) any collateral securing a loan may be insufficient
or unavailable to the Fund, because, for example, the value of the
collateral securing a loan can decline, be insufficient to meet the
obligations of the borrower, or be difficult to liquidate, and the Fund’s
rights to collateral may be limited by bankruptcy or insolvency laws;
(iii) investments in highly leveraged loans or loans of stressed,
distressed, or defaulted issuers may be subject to significant credit and
liquidity risk; (iv) a bankruptcy or other court proceeding could
delay or limit the ability of the Fund to collect the principal and
interest payments on that borrower’s loans or adversely affect the Fund’s
rights in collateral |
relating
to a loan; (v) there may be limited public information available
regarding the loan and the relevant borrower(s); (vi) the use of a
particular interest rate benchmark may limit the Fund’s ability to achieve
a net return to shareholders that consistently approximates the average
published Prime Rate of U.S. banks; (vii) the prices of certain
floating rate loans that include a feature that prevents their interest
rates from adjusting if market interest rates are below a specified
minimum level may appreciate less than other instruments in response to
changes in interest rates should interest rates rise but remain below the
applicable minimum level; (viii) if a borrower fails to comply with
various restrictive covenants that may be found in loan agreements, the
borrower may default in payment of the loan; (ix) if the Fund invests
in loans that contain fewer or less restrictive constraints on the
borrower than certain other types of loans (“covenant-lite” loans), it may
have fewer rights against the borrowers of such loans, including fewer
protections against the possibility of default and fewer remedies in the
event of default; (x) the loan is unsecured; (xi) there is a
limited secondary market; (xii) transactions in loans may settle on a
delayed basis, and the Fund may not receive the proceeds from the sale of
a loan for a substantial period of time after the sale, which may result
in sale proceeds related to the sale of loans not being available to make
additional investments or to meet the Fund’s redemption obligations until
potentially a substantial period after the sale of the loans; and
(xiii) loans may be difficult to value and may be illiquid, which may
adversely affect an investment in the
Fund. |
• |
market risk:
the risk that markets will perform poorly or that the
returns from the securities in which the Fund invests will underperform
returns from the general securities markets or other types of investments.
Markets may, in response to governmental actions or intervention or
general market conditions, including real or perceived adverse political,
economic or market conditions, tariffs and trade disruptions, inflation,
recession, changes in interest or currency rates, lack of liquidity in the
bond markets or adverse investor sentiment, or other external factors,
experience periods of high volatility and reduced liquidity. During those
periods, the Fund may experience high levels of shareholder redemptions,
and may have to sell securities at times when the Fund would otherwise not
do so, and potentially at unfavorable prices. Certain securities may be
difficult to value during such periods. Market risk involves the risk that
the value of the Fund’s investment portfolio will change, potentially
frequently and in large amounts, as the prices of its investments go up or
down. During periods of severe market stress, it is possible that the
market for some or all of a Fund’s investments may become highly illiquid.
In such an event, the Fund may find it difficult to sell loans it holds,
and, for loans it is able to sell in such circumstances, the trade
settlement period may be longer than anticipated. Recently, there have
been inflationary price movements, which have caused the fixed income
securities markets to experience heightened levels of interest rate
volatility and liquidity risk. Please see “debt securities risks —
interest rate risk” herein for more
information. |
• |
mortgage-backed
securities risk: the risk that borrowers may default on
their mortgage obligations or the guarantees underlying the
mortgage-backed securities will default or otherwise fail and that, during
periods of falling interest rates, mortgage-backed securities will be
called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate. During periods of
rising interest rates, the average life of a mortgage-backed security may
extend, which may lock in a below-market interest rate, increase the
security’s duration, and reduce the value of the security. Enforcing
rights against the underlying assets or collateral may be difficult, or
the underlying assets or collateral may be insufficient if the issuer
defaults. The values of certain types of mortgage-backed securities, such
as inverse floaters and interest-only and principal-only securities, may
be extremely sensitive to changes in interest rates and prepayment rates.
The Fund may invest in mortgage-backed securities that are subordinate in
their right to receive payment of interest and repayment of principal to
other classes of the issuer’s
securities. |
• |
operational and
information security risks: an investment in the Fund, like
any fund, can involve operational risks arising from factors such as
processing errors, human errors, inadequate or failed internal or external
processes, failures in systems and technology, changes in personnel and
errors caused by third-party service providers. The occurrence of any of
these failures, errors or breaches could result in investment losses to
the Fund, a loss of information, regulatory scrutiny, reputational damage
or other events, any of which could have a material adverse effect on the
Fund. While the Fund seeks to minimize such events through controls and
oversight, there may still be failures that could cause losses to the
Fund. |
• |
securities or
sector selection risk: the risk that the securities held by
the Fund will underperform securities held in other funds investing in
similar asset classes or comparable benchmarks because of the portfolio
managers’ choice of securities or sectors for investment. To the extent
the Fund allocates a higher percentage of its investment portfolio to a
particular sector or related sectors, the Fund will be more susceptible to
events or factors affecting companies in that sector or related sectors.
For example, the values of securities of companies in the same or related
sectors may be negatively affected by the common characteristics they
share, the common business risks to which they are subject, common
regulatory burdens, or regulatory changes that affect them similarly. Such
characteristics, risks, burdens or changes include, but are not limited
to, changes in governmental regulation, inflation or deflation, rising or
falling interest rates, competition from new entrants, and other economic,
market, political or other developments specific to that sector or related
sectors. |
• |
structured
products and structured notes risk: the risk that an
investment in a structured product, which includes, among other things,
CDOs, mortgage-backed securities, other types of asset-backed securities
and certain types of structured notes, may decline in value due to changes
in the underlying instruments, indexes, interest rates or other factors on
which the product is based (“reference measure”). Depending on the reference
measure used and the use of multipliers or deflators (if any), changes in
interest rates and movement of the reference measure may cause significant
price and cash flow fluctuations. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique.
Holders of structured products indirectly bear risks associated with the
reference measure, are subject to counterparty risk and typically do not
have direct rights against the reference measure. Structured products are
generally privately offered and sold, and thus, are not registered under
the securities laws and may be thinly traded or have a limited trading
market and may have the effect of increasing the Fund’s illiquidity,
reducing the Fund’s income and the value of the investment. At a
particular point in time, the Fund may be unable to find qualified buyers
for these securities. Investments in structured notes involve risks
including interest rate risk, credit risk and market
risk. |
• |
U.S. Government
securities risk: the risk that debt securities issued or
guaranteed by certain U.S. Government agencies, instrumentalities, and
sponsored enterprises are not supported by the full faith and credit of
the U.S. Government, and so investments in their securities or obligations
issued by them involve credit risk greater than investments in other types
of U.S. Government securities. |
• |
valuation
risk: the risk that the Fund will not value its investments
in a manner that accurately reflects their market values or that the Fund
will not be able to sell any investment at a price equal to the valuation
ascribed to that investment for purposes of calculating the Fund’s net
asset value (“NAV”). The valuation
of the Fund’s investments involves subjective judgment. Certain securities
in which the Fund may invest may be more difficult to value accurately,
especially during periods of market disruptions or extreme market
volatility. Incorrect valuations of the Fund’s portfolio holdings could
result in the Fund’s shareholder transactions being effected at an NAV
that does not accurately reflect the underlying value of the Fund’s
portfolio, resulting in the dilution of shareholder
interests. |
|
Quarter
ended | |||
- |
Quarter
ended |
One Year | Five Years | Ten Years |
Since Inception
( | |||||||||||||||||
Class I | ||||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Return
After Taxes on Distributions |
||||||||||||||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
||||||||||||||||||||
Class N |
| |||||||||||||||||||
Return
Before Taxes |
||||||||||||||||||||
Morningstar LSTA US Leveraged Loan TR USD
Index (reflects no deduction for fees, expenses or taxes) |
Name |
Experience
with
the
Fund |
Primary Title with the Investment Adviser | ||
Robert Cohen | Since the Fund’s inception in February 2013 | Director of Global Developed Credit | ||
Philip Kenney | Since July 2018 | Director of Corporate Research |
Minimum Initial Investment: | Subsequent Investment: |
|||||||||||
Regular Accounts |
IRAs/HSAs |
All Accounts and
Automatic
Investment Plans |
||||||||||
Class I Shares | $ | 100,000 | $ | 5,000 | $ | 100 | ||||||
Class N Shares | $ | 2,000 | $ | 500 | $ | 100 |
Share Class | Class I | Class N | Class R6 | |||
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) | ||||||
Maximum Deferred Sales Charge (Load) (as a percentage of the original purchase price) | ||||||
Maximum Sales Charge (Load) Imposed on Reinvested Dividends | ||||||
Redemption Fee (as a percentage of shares redeemed within 90 days of purchase) | ||||||
Fee for Redemption by Wire | $ |
$ |
$ | |||
Exchange Fee | ||||||
Account Fee |
Share Class | Class I | Class N | Class R6 | |||||||||
Management Fees | ||||||||||||
Distribution and/or Service (12b‑1) Fees | ||||||||||||
Other Expenses (includes sub‑transfer agent accounting or administrative services expenses) | ||||||||||||
Total Annual Fund Operating Expenses |
Class I | Class N | Class R6 | ||||
1 Year | $ |
$ |
$ | |||
3 Years | $ |
$ |
$ | |||
5 Years | $ |
$ |
$ | |||
10 Years | $ |
$ |
$ |
• |
active
management risk: the risk that the Fund will fail to meet
its investment objective and that the Fund’s investment performance will
depend, at least in part, on how its assets are allocated and reallocated
among asset classes, sectors, underlying funds and/or investments and that
such allocation will focus on asset classes, sectors, underlying funds,
and/or investments that perform poorly or underperform other asset
classes, sectors, underlying funds, and/or available investments. Any
given investment strategy may fail to produce the intended results, and
the Fund’s portfolio may underperform other comparable funds because of
portfolio management decisions related to, among other things, the
selection of investments, portfolio construction, risk assessments, and/or
the outlook on market trends and
opportunities. |
• |
asset-backed
securities investment risk: the risk that borrowers may
default on the obligations that underlie the asset-backed security and
that, during periods of falling interest rates, asset-backed securities
may be called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate, and the risk that
the impairment of the value of the collateral underlying a security in
which the Fund invests (due, for example, to non‑payment of loans) will
result in a reduction in the value of the
security. |
• |
cash position
risk: the risk that to the extent that the Fund
holds assets in cash, cash equivalents, and other short-term investments,
the ability of the Fund to meet its objective may be
limited. |
• |
collateralized
debt obligations risk: the risks of an investment in a CDO
depend largely on the quality and type of the collateral and the tranche
of the CDO in which the Fund invests. Normally, collateralized bond
obligations (“CBOs”), CLOs and
other CDOs are privately offered and sold, and thus are not registered
under the securities laws. As a result, investments in CDOs may be
illiquid. In addition to the risks associated with debt instruments (e.g., interest rate risk and credit
risk), CDOs carry additional risks including, but not limited to:
(i) the possibility that distributions from collateral will not be
adequate to make interest or other payments; (ii) the quality of the
collateral may decline in value or default; (iii) the possibility
that the Fund may invest in CDOs that are subordinate to other classes of
the issuer’s securities; and (iv) the complex structure of the
security may not be fully understood at the time of investment and may
produce disputes with the issuer or unexpected investment
results. |
• |
counterparty
risk: the risk that the Fund will be subject to credit risk
with respect to the counterparties to the derivative contracts and other
instruments entered into by the Fund; that the Fund’s counterparty will be
unable or unwilling to perform its obligations; that the Fund will be
unable to enforce contractual remedies if its counterparty defaults; that
if a counterparty (or an affiliate of a counterparty) becomes bankrupt,
the Fund may experience significant delays in obtaining any recovery or
may obtain limited or no recovery in a bankruptcy or other insolvency
proceeding. To the extent that the Fund enters into multiple transactions
with a single or a small set of counterparties, it will be subject to
increased counterparty risk. |
• |
debt securities
risks: |
¡ |
credit risk:
the risk that an issuer, counterparty or other obligor to
the Fund will fail to pay its obligations to the Fund when they are due,
which may reduce the Fund’s income and/or reduce, in whole or in part, the
value of the Fund’s investment. Actual or perceived changes in the
financial condition of an obligor, changes in economic, social or
political conditions that affect a particular type of security,
instrument, or obligor, and changes in economic, social or political
conditions generally can increase the risk of default by an obligor, which
can affect a security’s or other instrument’s credit quality or value and
an obligor’s ability to honor its obligations when due. The values of
lower-quality debt securities (including debt securities commonly known as
“high yield” securities or “junk bonds”), including floating rate loans,
tend to be particularly sensitive to these changes. Certain debt
securities in the lowest investment grade category also may be considered
to possess some speculative characteristics by certain rating agencies.
The values of securities or instruments also may decline for a number of
other reasons that relate directly to the obligor, such as management
performance, financial leverage, and reduced demand for the obligor’s
goods and services, as well as the historical and prospective earnings of
the obligor and the value of its
assets. |
¡ |
extension risk:
the risk that if interest rates rise, repayments of
principal on certain debt securities, including, but not limited to,
floating rate loans and mortgage-related securities, may occur at a slower
rate than expected and the expected maturity of those securities could
lengthen as a result. Securities that are subject to extension risk
generally have a greater potential for loss when prevailing interest rates
rise, which could cause their values to fall
sharply. |
¡ |
interest rate
risk: the risk that debt instruments will change in value
because of changes in interest rates. The value of an instrument with a
longer duration (whether positive or negative) will be more sensitive to
changes in interest rates than a similar instrument with a shorter
duration. Bonds and other debt instruments typically have a positive
duration. The value of a debt instrument with positive duration will
generally decline if interest rates increase. Certain other investments,
such as inverse floaters and certain derivative instruments, may have a
negative duration. The value of instruments with a negative duration will
generally decline if interest rates decrease. Inverse floaters,
interest-only and principal-only securities are especially sensitive to
interest rate changes, which can affect not only their prices but can also
change the income flows and repayment assumptions about those investments.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. The risks associated with
rising interest rates are heightened under current market conditions given
that the U.S. Federal Reserve has raised interest rates
from |
historically
low levels and may continue to do so. Fiscal, economic, monetary or other
government policies or measures have in the past, and may in the future,
cause or exacerbate risks associated with interest rates, including
changes in interest rates. Further, in market environments where interest
rates are rising, issuers may be less willing or able to make principal
and interest payments on fixed-income investments when
due. |
¡ |
prepayment
risk: the risk that the issuer of a debt security, including
floating rate loans and mortgage-related securities, repays all or a
portion of the principal prior to the security’s maturity. In times of
declining interest rates, there is a greater likelihood that the Fund’s
higher yielding securities will be pre‑paid with the Fund being unable to
reinvest the proceeds in an investment with as great a yield. Prepayments
can therefore result in lower yields to shareholders of the
Fund. |
• |
defaulted
securities risk: the significant risk of the uncertainty of
repayment of defaulted securities (e.g., a security on which a principal or
interest payment is not made when due) and obligations of distressed
issuers (including insolvent issuers or issuers in payment or covenant
default, in workout or restructuring or in bankruptcy or similar
proceedings). Such investments entail high risk and have speculative
characteristics. |
• |
derivatives
risk: the risk that an investment in derivatives will not
perform as anticipated by the Adviser, may not be available at the time or
price desired, cannot be closed out at a favorable time or price, will
increase the Fund’s transaction costs, or will increase the Fund’s
volatility; that derivatives may create investment leverage; that, when a
derivative is used as a substitute for or alternative to a direct cash
investment, the transaction may not provide a return that corresponds
precisely or at all with that of the cash investment; that the positions
may be improperly executed or constructed; that the Fund’s counterparty
will be unable or unwilling to perform its obligations; or that, when used
for hedging purposes, derivatives will not provide the anticipated
protection, causing the Fund to lose money on both the derivatives
transaction and the exposure the Fund sought to
hedge. |
• |
emerging market
country risk: the risk that investing in emerging markets,
as compared to foreign developed markets, increases the likelihood that
the Fund will lose money, due to more limited information about the issuer
and/or the security; higher brokerage costs; different accounting,
auditing and financial reporting standards; less developed legal systems
and thinner trading markets; the possibility of currency blockages or
transfer restrictions; an emerging market country’s dependence on revenue
from particular commodities or international aid; and expropriation,
nationalization or other adverse political or economic
developments. |
• |
financial
services risk: the risk that an investment in issuers in the
financial services sector or transactions with one or more counterparties
in the financial services sector may be adversely affected by, among other
things: (i) changes in governmental regulation, which may limit both
the amounts and the types of loans and other financial commitments
financial services companies can make, the interest rates and fees they
can charge, the scope of their activities, the prices they can charge and
the amount of capital they must maintain; (ii) fluctuations,
including as a result of interest rate changes or increased competition,
in the availability and cost of capital funds on which the profitability
of financial services companies is largely dependent;
(iii) deterioration of the credit markets; (iv) credit losses
resulting from financial difficulties of borrowers, especially when
financial services companies are exposed to non‑diversified or
concentrated loan portfolios; (v) financial losses associated with
investment activities, especially when financial services companies are
exposed to financial leverage; (vi) the risk that any financial
services company experiences substantial declines in the valuations of its
assets, takes action to raise capital, or ceases operations;
(vii) the risk that a market shock or other unexpected market,
economic, political, regulatory, or other event might lead to a sudden
decline in the values of most or all companies in the financial services
sector; (viii) events leading to limited liquidity, defaults,
non‑performance or other adverse developments that affect financial
institutions or the financial services industry generally, or concerns or
rumors about any events of these kinds or other similar risks, leading to
market-wide liquidity problems; and (ix) the interconnectedness or
interdependence among financial services companies, including the risk
that the financial distress or failure of one financial services company
may materially and adversely affect a number of other financial services
companies. |
• |
focused
investment risk: the risk that a fund that invests a
substantial portion of its assets in a particular market, industry,
sector, group of industries or sectors, country, region, group of
countries or asset class is, relative to a fund that invests in a more
diverse investment portfolio, more susceptible to any single economic,
market, political, regulatory or other occurrence. This is because, for
example, issuers in a particular market, industry, region, sector or asset
class may react similarly to specific economic, market, regulatory,
political or other developments. The particular markets, industries,
regions, sectors or asset classes in which the Fund may focus its
investments may change over time and the Fund may alter its focus at
inopportune times. |
• |
foreign
currency risk: the risk that fluctuations in exchange rates
may adversely affect the value of the Fund’s investments denominated in
foreign currencies. |
• |
foreign
investing risk: the risk that investments in foreign
securities or in issuers with significant exposure to foreign markets, as
compared to investments in U.S. securities or in issuers with
predominantly domestic market exposure, may be more vulnerable to
economic, political, and social instability and subject to less government
supervision, less protective custody practices, lack of transparency,
inadequate regulatory and accounting standards, delayed or infrequent
settlement of transactions, and foreign taxes. If the Fund buys securities
denominated in a foreign currency, receives income in foreign currencies,
or holds foreign currencies from time to time, the value of the Fund’s
assets, as measured in U.S. dollars, can be affected unfavorably by
changes in exchange rates relative to the U.S. dollar or other foreign
currencies. Foreign markets are also subject to the risk that a foreign
government could restrict foreign exchange transactions or otherwise
implement unfavorable currency regulations. In addition, foreign
securities may be subject to currency exchange rates or regulations, the
imposition of economic sanctions, tariffs or other government
restrictions, higher transaction and other costs, reduced liquidity, and
delays in settlement. |
• |
high yield
risk: the risk that debt instruments rated below investment
grade or debt instruments that are unrated and of comparable or lesser
quality are predominantly speculative. These instruments, commonly known
as “junk bonds,” have a higher degree of default risk and may be less
liquid than higher-rated bonds. These instruments may be subject to
greater price volatility due to such factors as specific corporate
developments, interest rate sensitivity, negative perceptions of high
yield investments generally, and less secondary market
liquidity. |
• |
inflation-indexed bond risk: the
risk that such bonds will change in value in response to actual or
anticipated changes in inflation rates in a manner unanticipated by the
Fund’s portfolio management team or investors generally. Inflation-indexed
bonds are subject to debt securities
risks. |
• |
investment
company and exchange-traded fund risk: the risk that an
investment company or other pooled investment vehicle, including any ETFs
or money market funds, in which the Fund invests will not achieve its
investment objective or execute its investment strategies effectively or
that significant purchase or redemption activity by shareholders of such
an investment company might negatively affect the value of its shares. The
Fund must pay its pro rata portion of an investment company’s fees and
expenses. To the extent the Adviser determines to invest Fund assets in
other investment companies, the Adviser will have an incentive to invest
in other DoubleLine funds over investment companies sponsored or managed
by others and to maintain such investments once made due to its own
financial interest in those products and other business
considerations. |
• |
leveraging
risk: the risk that certain investments by the Fund
involving leverage may have the effect of increasing the volatility of the
value of the Fund’s portfolio, and the risk of loss in excess of invested
capital. |
• |
liquidity risk:
the risk that the Fund may be unable to sell a portfolio
investment at a desirable time or at the value the Fund has placed on the
investment. Illiquidity may be the result of, for example, low trading
volume, lack of a market maker, or contractual or legal restrictions that
limit or prevent the Fund from selling securities or closing derivative
positions. During periods of substantial market disruption, a large
portion of the Fund’s assets could potentially experience significant
levels of illiquidity. The values of illiquid investments are often more
volatile than the values of more liquid investments. It may be more
difficult for the Fund to determine a fair value of an illiquid investment
than that of a more liquid comparable
investment. |
• |
loan
risk: the risk that (i) if the Fund holds a loan
through another financial intermediary, or relies on a financial
intermediary to administer the loan, its receipt of principal and interest
on the loan may be subject to the credit risk of that financial
intermediary; (ii) any collateral securing a loan may be insufficient
or unavailable to the Fund, because, for example, the value of the
collateral securing a loan can decline, be insufficient to meet the
obligations of the borrower, or be difficult to liquidate, and the Fund’s
rights to collateral may be limited by bankruptcy or insolvency laws;
(iii) investments in highly leveraged loans or loans of stressed,
distressed, or defaulted issuers may be subject to significant credit and
liquidity risk; (iv) a bankruptcy or other court proceeding could
delay or limit the ability of the Fund to collect the principal and
interest payments on that borrower’s loans or adversely affect the Fund’s
rights in collateral relating to a loan; (v) there may be limited
public information available regarding the loan and the relevant
borrower(s); (vi) the use of a particular interest rate benchmark may
limit the Fund’s ability to achieve a net return to shareholders that
consistently approximates the average published Prime Rate of U.S. banks;
(vii) the prices of certain floating rate loans that include a
feature that prevents their interest rates from adjusting if market
interest rates are below a specified minimum level may appreciate less
than other instruments in response to changes in interest rates should
interest rates rise but remain below the applicable minimum level;
(viii) if a borrower fails to comply with various restrictive
covenants |
that
may be found in loan agreements, the borrower may default in payment of
the loan; (ix) if the Fund invests in loans that contain fewer or
less restrictive constraints on the borrower than certain other types of
loans (“covenant-lite” loans), it may have fewer rights against the
borrowers of such loans, including fewer protections against the
possibility of default and fewer remedies in the event of default;
(x) the loan is unsecured; (xi) there is a limited secondary
market; (xii) transactions in loans may settle on a delayed basis,
and the Fund may not receive the proceeds from the sale of a loan for a
substantial period of time after the sale, which may result in sale
proceeds related to the sale of loans not being available to make
additional investments or to meet the Fund’s redemption obligations until
potentially a substantial period after the sale of the loans; and
(xiii) loans may be difficult to value and may be illiquid, which may
adversely affect an investment in the Fund. The Fund may invest in loans
directly or indirectly by investing in shares of the DoubleLine Floating
Rate Fund and in either case will be subject to the risks described
above. |
• |
market risk:
the risk that markets will perform poorly or that the
returns from the securities in which the Fund invests will underperform
returns from the general securities markets or other types of investments.
Markets may, in response to governmental actions or intervention or
general market conditions, including real or perceived adverse political,
economic or market conditions, tariffs and trade disruptions, inflation,
recession, changes in interest or currency rates, lack of liquidity in the
bond markets or adverse investor sentiment, or other external factors,
experience periods of high volatility and reduced liquidity. During those
periods, the Fund may experience high levels of shareholder redemptions,
and may have to sell securities at times when the Fund would otherwise not
do so, and potentially at unfavorable prices. Certain securities may be
difficult to value during such periods. Market risk involves the risk that
the value of the Fund’s investment portfolio will change, potentially
frequently and in large amounts, as the prices of its investments go up or
down. During periods of severe market stress, it is possible that the
market for some or all of a Fund’s investments may become highly illiquid.
Recently, there have been inflationary price movements, which have caused
the fixed income securities markets to experience heightened levels of
interest rate volatility and liquidity risk. Please see “debt securities
risks — interest rate risk” herein for more
information. |
• |
mortgage-backed
securities risk: the risk that borrowers may default on
their mortgage obligations or the guarantees underlying the
mortgage-backed securities will default or otherwise fail and that, during
periods of falling interest rates, mortgage-backed securities will be
called or prepaid, which may result in the Fund having to reinvest
proceeds in other investments at a lower interest rate. During periods of
rising interest rates, the average life of a mortgage-backed security may
extend, which may lock in a below-market interest rate, increase the
security’s duration, and reduce the value of the security. Enforcing
rights against the underlying assets or collateral may be difficult, or
the underlying assets or collateral may be insufficient if the issuer
defaults. The values of certain types of mortgage-backed securities, such
as inverse floaters and interest-only and principal-only securities, may
be extremely sensitive to changes in interest rates and prepayment rates.
The Fund may invest in mortgage-backed securities that are subordinate in
their right to receive payment of interest and repayment of principal to
other classes of the issuer’s
securities. |
• |
operational and
information security risks: an investment in the Fund, like
any fund, can involve operational risks arising from factors such as
processing errors, human errors, inadequate or failed internal or external
processes, failures in systems and technology, changes in personnel and
errors caused by third-party service providers. The occurrence of any of
these failures, errors or breaches could result in investment losses to
the Fund, a loss of information, regulatory scrutiny, reputational damage
or other events, any of which could have a material adverse effect on the
Fund. While the Fund seeks to minimize such events through controls and
oversight, there may still be failures that could cause losses to the
Fund. |
• |
real estate
sector risk: the risk that real estate-related investments
may decline in value as a result of factors affecting the real estate
sector, such as the supply of real property in certain markets, changes in
zoning laws, delays in completion of construction, changes in real estate
values, changes in property taxes, levels of occupancy, and local,
regional, and general market conditions. Equity REITs, which invest
primarily in direct fee ownership or leasehold ownership of real property
and derive most of their income from rents, are generally affected by
changes in the values of and incomes from the properties they own.
Mortgage REITs invest mostly in mortgages on real estate, which may
secure, for example, construction, development or long-term loans, and the
main source of their income is mortgage interest payments. Mortgage REITs
may be affected by the credit quality of the mortgage loans they hold. A
hybrid REIT combines the characteristics of equity REITs and mortgage
REITs, generally by holding both ownership interests and mortgage
interests in real estate, and thus may be subject to risks associated with
both real estate ownership and mortgage-related investments. Along with
the risks common to different types of real estate-related investments,
REITs, no matter the type, involve additional risk factors, including poor
performance by the REIT’s manager, adverse changes to the tax laws, and
the possible failure by the REIT to qualify for the favorable tax
treatment available to REITs under the Internal Revenue Code of 1986, as
amended, or the exemption from registration under the Investment Company
Act of 1940, as amended. REITs are not diversified and are heavily
dependent on cash flow earned on the property interests they
hold. |
• |
restricted
securities risk: the risk that the Fund may be prevented or
limited by law or the terms of an agreement from selling a security (a
“restricted security”). To the
extent that the Fund is permitted to sell a restricted security, there can
be no assurance that a trading market will exist at any particular time,
and the Fund may be unable to dispose of the security promptly at
reasonable prices or at all. The Fund may have to bear the expense of
registering the securities for resale and the risk of substantial delays
in effecting the registration. Also, restricted securities may be
difficult to value because market quotations may not be readily available,
and the values of restricted securities may have significant
volatility. |
• |
securities or
sector selection risk: the risk that the securities held by
the Fund will underperform securities held in other funds investing in
similar asset classes or comparable benchmarks because of the portfolio
managers’ choice of securities or sectors for investment. To the extent
the Fund allocates a higher percentage of its investment portfolio to a
particular sector or related sectors, the Fund will be more susceptible to
events or factors affecting companies in that sector or related sectors.
For example, the values of securities of companies in the same or related
sectors may be negatively affected by the common characteristics they
share, the common business risks to which they are subject, common
regulatory burdens, or regulatory changes that affect them similarly. Such
characteristics, risks, burdens or changes include, but are not limited
to, changes in governmental regulation, inflation or deflation, rising or
falling interest rates, competition from new entrants, and other economic,
market, political or other developments specific to that sector or related
sectors. |
• |
short position
risk: the risk that an increase in the value of an
instrument, index or interest rate with respect to which the Fund has
established a short position will result in a loss to the
Fund. |
• |
sovereign debt
obligations risk: the risk that investments in debt
obligations of sovereign governments may lose value due to the government
entity’s unwillingness or inability to repay principal and interest when
due in accordance with the terms of the debt or otherwise in a timely
manner. Sovereign governments may default on their debt obligations for a
number of reasons, including social, political, economic and diplomatic
changes in countries issuing sovereign debt. The Fund may have limited (or
no) recourse in the event of a default because bankruptcy, moratorium and
other similar laws applicable to issuers of sovereign debt obligations may
be substantially different from those applicable to private issuers, and
any recourse may be subject to the political climate in the relevant
country. In addition, foreign governmental entities may enjoy various
levels of sovereign immunity, and it may be difficult or impossible to
bring a legal action against a foreign governmental entity or to enforce a
judgment against such an entity. Holders of certain foreign government
debt securities may be requested to participate in the restructuring of
such obligations and to extend further loans to their issuers. There can
be no assurance that the foreign government debt securities in which the
Fund may invest will not be subject to similar restructuring arrangements
or to requests for new credit, which may adversely affect the Fund’s
holdings. |
• |
structured
products and structured notes risk: the risk that an
investment in a structured product, which includes, among other things,
CDOs, mortgage-backed securities, other types of asset-backed securities
and certain types of structured notes, may decline in value due to changes
in the underlying instruments, indexes, interest rates or other factors on
which the product is based (“reference measure”). Depending on the reference
measure used and the use of multipliers or deflators (if any), changes in
interest rates and movement of the reference measure may cause significant
price and cash flow fluctuations. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique.
Holders of structured products indirectly bear risks associated with the
reference measure, are subject to counterparty risk and typically do not
have direct rights against the reference measure. Structured products are
generally privately offered and sold, and thus, are not registered under
the securities laws and may be thinly traded or have a limited trading
market and may have the effect of increasing the Fund’s illiquidity,
reducing the Fund’s income and the value of the investment. At a
particular point in time, the Fund may be unable to find qualified buyers
for these securities. Investments in structured notes involve risks
including interest rate risk, credit risk and market
risk. |
• |
U.S. Government
securities risk: the risk that debt securities issued or
guaranteed by certain U.S. Government agencies, instrumentalities, and
sponsored enterprises are not supported by the full faith and credit of
the U.S. Government, and so investments in their securities or obligations
issued by them involve credit risk greater than investments in other types
of U.S. Government securities. |
• |
valuation
risk: the risk that the Fund will not value its investments
in a manner that accurately reflects their market values or that the Fund
will not be able to sell any investment at a price equal to the valuation
ascribed to that investment for purposes of calculating the Fund’s net
asset value (“NAV”). The valuation
of the Fund’s investments involves subjective judgment. Certain securities
in which the Fund may invest may be more difficult to value accurately,
especially during periods of market disruptions or extreme market
volatility. Incorrect valuations of the Fund’s portfolio holdings could
result in the Fund’s shareholder transactions being effected at an NAV
that does not accurately reflect the underlying value of the Fund’s
portfolio, resulting in the dilution of shareholder
interests. |
|
Quarter
ended | |||
- |
Quarter
ended |
One Year | Five Years |
Since Inception
( | |||||||||||||
Class I | |||||||||||||||
Return
Before Taxes |
|||||||||||||||
Return
After Taxes on Distributions |