Doubleline uses swaps to get their equity exposure in these funds and a decent portion of those swaps are done with the provider of the index their following- Barclay's. Of course, Barclay's offers their own version of this fund, as an ETN, sans the bonds. I'm having trouble understanding why Barclay's would want to short their own index and their own fund and I'm also unclear why there's no conflict of interest.
I can't imagine they really want to be short their own index which means they have to turn around and buy at least the etfs that make up the index and/or maybe even the individual stocks. It also means they have to manage the trading costs and the market impact of those transactions. Is it because they're a market maker so all that volume is making money for them as a market maker? It seems like all of their counterparties are market makers so if they're participating in the swaps to drive volume then it's great to have a competitive market for the lowest financing rate on the swaps.
