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DoubleLine Yield Opportunities Fund

edited April 19 in Other Investing
DLY: A Discounted Fund For Monthly Income
Apr. 18, 2021 6:41 AM ETDoubleLine Yield Opportunities Fund (DLY)

https://www.google.com/amp/s/seekingalpha.com/amp/article/4419616-dly-discounted-fund-monthly-income

DLY

Summary
DLY launched at the beginning of 2020, just in time for the COVID-induced panic selling.
Since that time, the fund has clawed back and headed higher.
The fund pays an attractive monthly distribution and is traded at a discount, though is not substantially undervalued either.
This article is also comparing extensively with DSL, another DoubleLine offering that frequently gets brought up together.
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Written by Nick Ackerman, co-produced by Stanford Chemist

Jeffrey Gundlach is one popular fixed-income guru - sometimes referred to as the "Bond King." He has several closed-end funds that are offered from his DoubleLine investment management firm. While he is much too busy doing CNBC interviews to do the day-to-day operations of the fund, his name is attached to them. Though I'd venture to say that he doesn't really have an active role in the fund. One of these funds is the DoubleLine Yield Opportunities Fund (DLY). It was launched earlier in 2020 and has put up respectable performance compared to a basket of other multisector bond FUND

DLY investment objective is quite simple: "seek a high level of total return, with an emphasis on current income." To achieve this, the fund will "invest in a portfolio of investments selected for its potential to provide a high level of total return, with an emphasis on current income. The Fund may invest in debt securities or other income producing investments of issuers anywhere in the world, including in emerging markets, and may invest in investments of any credit quality."

Comments

  • I owned one of the DL OE funds, years ago. It lost its mojo, so I got out. This is an ETF? A CEF? It just simply seems to fly in the face of what I want from my bond funds. So, not only do you have to pay attention to the share price, but there is NAV to consider, too. And I would not want to be waiting around to see IF a quarterly dividend were declared. I like those coming in, routinely, without even having to think about it--- the way dividends get paid-out with an OEF. And I prefer monthly pay-outs, simply because the budget I must keep is a monthly task, not a quarterly project. :)
  • It would be informative to this board to see more analysis from johnN on what makes this DL ETF differs from other ETFs out in the market.
  • DLY is a closed-end fund, so discounts and premiums to nav are considerations as well.
  • I agree with Sven that posts would be more helpful if they included some comment about why the poster found an article or fund interesting.

    carew388 identifies one of the first two questions I ask specifically about CEFs. The other is the amount of leverage, since CEFs are often highly leveraged. This information is easy to find ...

    Leverage is 20% (CEF Connect), and DLY started its short life with a nearly 10% premium before plunging in fall 2020 to a 10.5% discount (per M*) and then settling in to a "not substantial[]" discount still greater than any of the dozen other leveraged multisector funds in the CEF Connect database.

    Regarding Crash's concern about the frequency and certainty of dividends: there is little special about CEFs in this regard. OEF bond funds may declare dividends annually (e.g. LSGLX), quarterly (e.g. BEGBX), monthly (e.g. VTABX), or even oddly (e.g. FBIIX in April, June, Oct, Dec).

    With OEFs you are left "waiting around to see IF a quarterly dividend were declared." BEGBX "generally expects to pay distributions of substantially all of its income, if any, quarterly, but may pay less frequently" (per prospectus). In reality, it has paid income dividends only three times in the past five years!

    According to CEF Connect, DLY pays monthly, and is a managed payout fund that has paid the identical amount in each of the 11 months of its short lifetime.

    Little of this raw data says why one might be interested in this fund.
  • "...Regarding Crash's concern about the frequency and certainty of dividends: there is little special about CEFs in this regard. OEF bond funds may declare dividends annually (e.g. LSGLX), quarterly (e.g. BEGBX), monthly (e.g. VTABX), or even oddly (e.g. FBIIX in April, June, Oct, Dec).

    With OEFs you are left "waiting around to see IF a quarterly dividend were declared." BEGBX "generally expects to pay distributions of substantially all of its income, if any, quarterly, but may pay less frequently" (per prospectus). In reality, it has paid income dividends only three times in the past five years!"
    *******************************************
    Yes, all of that's true. It's all rather variable, or at least it CAN be. That's why I look to see the past pay-out pattern on the calendar for Fund X or Y or Z. It's quickly clear what schedule they're following. Deviations from a customary quarterly or monthly distribution schedule cause me simply to check out other, more reliable prospects. For example, I note that MAPIX and MAINX have not been "Steady-Eddies" in following a dividend pay-out schedule in the past year or two. And the amounts of the divs. vary widely. I don't own Matthews, but I track it.
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