DoubleLine: "Smart Beta, Meet Smart Alpha"

SmartBeta,
MeetSmartAlpha
LiveWebcastHostedBy:
JeffreySherman,CFA
PortfolioManager
October21,2014
102114 SmartBeta,SmartAlpha1
Disclaimer
TheFundsinvestmentobjectives,risks,chargesandexpensesmustbeconsidered
carefullybeforeinvesting.Thestatutoryandsummaryprospectuscontainthisandother
importantinformationabouttheFunds,andmaybeobtainedbycalling1(877)354
6311/1(877)DLINE11,orvisitingwww.doublelinefunds.com.Readcarefullybefore
investing.
TheDoubleLine Shiller EnhancedCAPEmayinvestinforeignsecuritieswhichinvolvegreatervolatilityandpolitical,economicandcurrencyrisksanddifferencesinaccountingmethods.Theserisks
aregreaterforinvestmentsinemergingmarkets.Inordertoachieveitsinvestmentobjectives,theFundmayusecertaintypesofexchangetradedfundsorinvestmentderivatives.Derivatives
involverisksdifferentfrom,andincertaincases,greaterthantheriskspresentedbymoretraditionalinvestments.Derivativesmayinvolvecertaincostsandriskssuchasliquidity,interestrate,
market,credit,managementandtheriskthatapositioncouldnotbeclosedwhenmostadvantageous.Investinginderivativescouldlosemorethantheamountinvested.. ETFinvestmentsinvolve
additionalriskssuchasthemarketpricetradingatadiscounttoitsnetassetvalue,anactivesecondarytradingmarketmaynotdeveloporbemaintained,ortradingmaybehaltedbythe
exchangeinwhichtheytrade,whichmayimpactafundsabilitytosellitsshares.
Investmentsindebtsecuritiestypicallydecreaseinvaluewheninterestratesrise.Thisriskisusuallygreaterforlongertermdebtsecurities.InvestmentsinAssetBackedandMortgageBacked
securitiesincludeadditionalrisksthatinvestorsshouldbeawareofincludingcreditrisk,prepaymentrisk,possibleilliquidityanddefault,aswellasincreasesusceptibilitytoadverseeconomic
developments.Investmentsinlowerratedandnonratedsecuritiespresentagreaterriskoflosstoprincipalandinterestthanhigherratedsecurities.TheFundmayalsoinvestinsecuritiesrelated
torealestate,whichmaydeclineinvalueasaresultoffactorsaffectingtherealestateindustry.
Equitiesmaydeclineinvalueduetobothrealandperceivedgeneralmarket,economicandindustryconditions.Thefundmaymake shortsalesofsecurities,whichinvolvestheriskthatlossesmay
exceedtheoriginalamountinvested.
BarclaysCapitalInc.anditsaffiliates("Barclays")isnottheissuerorproducerofDoubleLine Shiller EnhancedCAPE
(theFund)andBarclayshasnoresponsibilities,obligationsordutiesto
investorsintheFund.TheShiller BarclaysCAPE
USSectorUSDIndex(theIndex)isatrademarkownedbyBarclaysBankPLCandlicensedforusebytheFund.WhiletheFundmayexecute
transaction(s)withBarclaysinorrelatingtotheIndex,FundinvestorsacquireinterestssolelyintheFundandinvestorsneitheracquireanyinterestintheIndexnorenterintoanyrelationshipof
anykindwhatsoeverwithBarclaysuponmakinganinvestmentintheFund.TheFundisnotsponsored,endorsed,soldorpromotedbyBarclaysandBarclaysmakesnorepresentationregardingthe
advisabilityofthe FundoruseoftheIndexoranydataincludedtherein.BarclaysshallnotbeliableinanywaytotheFund, investorsortootherthirdpartiesinrespectoftheuseoraccuracyofthe
Indexoranydataincludedtherein.
TheShillerBarclaysCAPE
USIndexFamily(theIndexFamily)hasbeendevelopedinpartbyRSBBI,LLC,theresearchprincipalofwhichisRobertJ.Shiller.RSBBI,LLCisnotaninvestmentadvisor
anddoesnotguaranteetheaccuracyandcompletenessoftheIndexFamilyoranydataormethodologyeitherincludedthereinoruponwhichitisbased.RSBBI,LLCshallhavenoliabilityforany
errors,omissionsorinterruptionsthereinandmakesnowarrantiesexpressedorimplied,astotheperformanceorresultsexperiencedbyanypartyfromtheuseofanyinformationincluded
thereinoruponwhichitisbased,andexpresslydisclaimsallwarrantiesofthemerchantabilityorfitnessforaparticularpurposewithrespectthereto,andshallnotbeliableforanyclaimsorlosses
ofanynatureinconnectionwiththeuseofsuchinformation,includingbutnotlimitedto,lostprofitsorpunitiveorconsequentialdamageseven,ifRSBBI,LLCisadvisedofthepossibilityofsame.
CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,MoodysandFitch).
WhiletheFundisnoload,managementfeesandotherexpensesstillapply.
Pleaserefertotheprospectusforfurtherdetails.
Diversificationdoesnotassureaprofitorprotectagainstlossinadecliningmarket.
DoubleLine
isaregisteredtrademarkofDoubleLine CapitalLP.
DoubleLine FundsaredistributedbyQuasarDistributors,LLC.
FundOfferings
RetailandInstitutionalClass
Retail Inst.
Nshare Ishare
Ticker DSENX DSEEX
MinInvestment
1
$2,000 $100,000
MinIRAInvestment $500 $5,000
Gross ExpenseRatio 1.63% 1.38%
NetExpenseRatio
2
1.24% 0.99%
ExpenseCap
2
0.90% 0.65%
Shiller EnhancedCAPE
WhiletheFundisnoload,managementfeesandotherexpensesstillapply.Pleaserefertotheprospectusforfurtherdetails.
1. Subsequentinvestmentminimumsare$500,$250fortheIRA.A$100minimumsubsequentpurchaseamountappliesforautomaticinvestmentplans.Pleaseseetheprospectusfor
furtherdetails. Periodicinvestmentplansdonotassureaprofitanddonotprotectagainstlossindecliningmarkets.
2. TheAdvisorhascontractuallyagreedtowaiveitsinvestmentadvisoryfeeandtoreimbursetheFundforotherordinaryoperating expensestotheextentnecessarytolimitordinary
operatingexpensestoanamountnottoexceed0.65%forClassIsharesand0.90%forClassNshares.Ordinaryoperatingexpenses excludetaxes,commissions,markups,litigation
expenses,indemnificationexpenses,interestexpenses,AcquiredFundFeesandExpenses,andanyextraordinaryexpenses.These expenselimitationsareexpectedtoapplyuntilatleast
July31,2015,exceptthattheymaybeterminatedbytheBoardofTrusteesatanytime.
ShillerEnhancedCAPE(DSEEX/DLSNX)
QuarterEndReturnsasofSeptember30,2014
QuarterEnd
September30,2014
3Q
2014
SinceInception
(103113to93014)
Ishare 0.41% 15.80%
Nshare 0.47% 15.57%
S&P500Index 1.13% 14.47%
AsofSeptember30,2014 IShare NShare
GrossSEC30DayYield 3.05% 2.78%
NetSEC30DayYield 3.31% 3.04%
Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturn
andprincipalvalueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthan
originalcost.Currentperformanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrenttothe
mostrecentmonthendmaybeobtainedbycalling213.633.8200orbyvisitingwww.doublelinefunds.com.
QuarterEndReturnsofSeptember30,2014.Subjecttochangewithoutnotice.
Theperformanceinformationshownassumesthereinvestmentofalldividendsanddistributions.
*TheAdvisorhascontractuallyagreedtowaiveitsinvestmentadvisoryfeeandtoreimbursetheFundforotherordinaryoperatingexpensestotheextentnecessarytolimitordinary
operatingexpensestoanamountnottoexceed0.65%forClassIsharesand0.90%forClassNshares.Ordinaryoperatingexpenses excludetaxes,commissions,markups,litigation
expenses,indemnificationexpenses,interestexpenses,AcquiredFundFeesandExpenses,andanyextraordinaryexpenses.These expenselimitationsareexpectedtoapplyuntilat
leastJuly31,2015,exceptthattheymaybeterminatedbytheBoardofTrusteesatanytime.
S&P500 Acapitalizedweightedindexof500stockschosenformarketsize,liquidityandindustrygrouping,amongotherfactors.Thisindexisdesignedtobealeadingindicatorof
U.S.equitiesandismeanttoreflecttherisk/returncharacteristicsofthelargecapuniverse.Youcannotinvestdirectlyinanindex.
Source:DoubleLine.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellany security.
AsofSeptember30,2014 IShare NShare
GrossExpenseRatio 1.38% 1.63%
NetExpenseRatio* 0.99% 1.24%
Expense Cap* 0.65% 0.90%
Announcements
WebcastNews
LuzPadilla November13,2014
DoubleLine EmergingMarketsFixedIncomeFundandLowDurationEmergingMarketsFund
1:15pmPDT/4:15pmEDT
PhilipBarach November25,2014
DoubleLine LowDurationBondFund
1:15pmPDT/4:15pmEDT
JeffreyGundlach December9,2014
DoubleLine TotalReturnBondFundandCoreFixedIncomeFund
1:15pmPDT/4:15pmEDT
ToReceivePresentationSlides,Emailfundinfo@doubleline.com
TABI
DoubleLineShillerEnhancedCAPEStrategy
Source:
WhatisDoubleValue?
Fordefinitions,pleaseseetheAppendix.
TheDoubleLineShillerEnhancedCAPEStrategycreatesDoubleValuefor
investorswhencombiningtwouniquesourcesofvalue:
TheShillerBarclaysCAPEU.S.SectorIndexattemptstoshiftportfolio
exposurestothecheapestsectorsofthelargecapequitymarkets
DoubleLines FixedIncomestrategystrivestoshiftitsexposurestothe
cheapestsectorsofthefixedincomemarkets.
Bothstrategiesattempttoofferavalueplayintheirrespectivemarkets,and
when combinedinvestorshavethepotential toreceiveDoubleValue.
ThedistinctstructureoftheDoubleLineShillerEnhancedCAPEStrategyallowsinvestorsto
simultaneouslyaccessreturnsoftheequitymarketsandfixedincomemarkets.Byusinganequity
indexswap,$1investedinthestrategyprovidesapproximately$1ofexposuretoeachmarket.
DoubleLineShillerCAPEStructure
DoubleLineShiller
EnhancedCAPE
DoubleLine
ActivelyManaged
FixedIncome
Portfolio
ShillerBarclays
CAPEUSSector
TRUSDIndex
InitialInvestment
*AportionoftheInitialInvestmentmaybepledgedascollateralundertheswap
**Marketfluctuationsmayprecludefull$1for$1exposurebetweentheswapsandthefixedincomeportfolio
TABII
DefiningtheCAPERatio
Source:
WhatistheCAPE
Ratio?
Inflation=therateofchangeofpricescalculatedonamonthlyorannualbasis.
P/E=PriceEarningsRatioisthevaluationratioofacompanysmarketvaluepersharedividedbythecompanysearningspershare(EPS).
Shiller BarclaysCAPEUSSectorTRUSDIndexincorporatestheprinciplesoflongterminvestingdistilledbyDr.RobertShiller andexpressedthroughtheCAPE(CyclicallyAdjustedPriceEarnings)
ratio(theCAPERatio).ItaimstoidentifyundervaluedsectorsbasedonamodifiedCAPERatio,andthenusesamomentumfactortoseektomitigatetheeffectsofpotentialvaluetraps.You
cannotinvestdirectlyinanindex.
AcclaimedvalueinvestorsBenjaminGrahamandDavidDoddnotedinSecurity
Analysis thatequityvaluationstendtofollowabusinesscycleof37years
TheCAPERatiowasformulatedintheseminal1988piece
1
fromProfessorRobert
ShillerandJohnCampbell.
CAPE=CyclicallyAdjustedP/E (PricetoEarnings)
TheCAPEratioseekstoassesslongertermequityvaluationbyusinganinflation
adjustedearningshorizonthatis10timeslongerthanthetraditionalP/Emeasure
SimilartothetraditionalP/EtheCAPEcanbeappliedtoasingleequity,aportfolio
ofequities,asectororabroadbasedindex
Earnings Average Adjusted Inflation Year 10
Price Share Equity Current
CAPE
1.Campbell,J.Y.,andR.J.Shiller,StockPrices,Earnings,andExpectedDividends,JournalofFinance,43:3,66176,1988
CAPE
RatioforValueInvesting Sectors
Source:ChangingTimes,ChangingValues:AHistoricalAnalysisofSectorswithintheUSStockMarket18722012,OliverD.BunnandRobertJ.Shiller,September4,2012
Anydataonpastperformance,modellingorbacktestingcontainedhereinisnoindicationastofutureperformance.
Youcannotinvestdirectlyinanindex.
PleaseseetheAppendixforindexdefinitions.
35%
25%
15%
5%
5%
15%
25%
35%
45%
10 15 20 25 30 35 40 45
CAPERatio
S
u
b
s
e
q
u
e
n
t
A
n
n
u
a
l
i
z
e
d
Y
e
a
r
T
o
t
a
l
R
e
t
u
r
n
InvestmentStart19831989
CAPEi nSept2012:
20.01
ByapplyingtheCAPE
ratio,equitysectorsshowingalowerCAPEratiohave
tendedtohavehighersubsequentreturns
45%
35%
25%
15%
5%
5%
15%
25%
35%
45%
5 15 25 35 45 55
CAPERatio
S
u
b
s
e
q
u
e
n
t
A
n
n
u
a
l
i
z
e
d
Y
e
a
r
T
o
t
a
l
R
e
t
u
r
n
CAPEi nSept2012:
20.43
CAPE
ratioandsubsequentreturnforS&P500Industrialsector
(19832012)
CAPE
ratioandsubsequentreturnforS&P500Utilitysector
(19832012)
RelativeCAPE
Indicator
Source:ChangingTimes,ChangingValues:AHistoricalAnalysisofSectorswithintheUSStockMarket18722012,OliverD.BunnandRobertJ.Shiller,September4,2012
Anydataonpastperformance,modellingorbacktestingcontainedhereinisnoindicationastofutureperformance.SeeHistoricalIndexPerformanceDisclaimer.
Shiller BarclaysCAPEUSSectorTRUSDIndexincorporatestheprinciplesoflongterminvestingdistilledbyDr.RobertShiller andexpressedthroughtheCAPE(CyclicallyAdjustedPriceEarnings)ratio
(theCAPERatio).ItaimstoidentifyundervaluedsectorsbasedonamodifiedCAPERatio,andthenusesamomentumfactortoseektomitigatetheeffectsofpotentialvaluetraps.Youcannot
investdirectlyinanindex.
PleaseseetheAppendixforHistoricalIndexPerformanceDisclaimer.
ToaccountforidiosyncraticdifferencesbetweensectorswhereCAPEratioshave
historicallybeenofdifferentmagnitudesonecanconstructaRelativeCAPEratio
Thismayallowinvestorstocomparesectorvaluationsonalevelplayingfield
TheRelativeCAPEratioisusedtocomparerelativevaluationamongequitysectors
Ratio CAPE Sector of Average Rolling Year 20
Ratio CAPE Sector Current
Ratio CAPE Relative

0.0
0.3
0.6
0.9
1.2
1.5
1.8
2.1
2002 2004 2006 2008 2010 2012
RelativeCAPERatio
Technology
Utilities
0
10
20
30
40
50
60
2002 2004 2006 2008 2010 2012
CAPERatio
Technology
Utilities
TABIII
SmartBeta:ShillerBarclaysCAPEU.S.SectorIndex
Source:
ShillerBarclaysCAPEU.S.SectorIndex
DoubleLineShiller
EnhancedCAPE
DoubleLine
ActivelyManaged
FixedIncome
Portfolio
ShillerBarclays
CAPEUSSector
TRUSDIndex
InitialInvestment
ShillerBarclaysCAPEU.S.SectorIndexSectorSelectionRules
Source:DoubleLineCapital,BarclaysCapital
CAPE=CyclicallyAdjustedPriceEarnings
Shiller BarclaysCAPEU.S.SectorIndex=Shiller BarclaysCAPEUSSectorTRUSDIndexincorporatestheprinciplesoflongterminvestingdistilledbyDr.RobertShiller and
expressedthroughtheCAPE(CyclicallyAdjustedPriceEarnings)ratio(theCAPERatio).ItaimstoidentifyundervaluedsectorsbasedonamodifiedCAPERatio,andthen
usesamomentumfactortoseektomitigatetheeffectsofpotentialvaluetraps.Youcannotinvestdirectlyinanindex.
10U.S.Sectors(aspertabletotheright)
Examine30yearsworthofindexvaluesandearningsfor10U.S.sectors
RelativeCAPEIndicatorforEachSector
Select5mostundervaluedsectorsbasedonRelativeCAPEindicator
Momentum
Removethesectorwiththelowest12monthpricemomentumforselectedsectors
Ranking
Equalweightin4favored,undervaluedsectorswithmostpositivepricemomentum
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
R
e
l
a
t
i
v
e
C
A
P
E
R
a
t
i
o
S
e
p
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e
m
b
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r
2
0
0
2
S
e
p
t
e
m
b
e
r
2
0
1
4
Energy Materials Industrials ConsumerDiscretionary
ConsumerStaples HealthCare Financials Utilities
Technology RealEstate
RealEstate
Discretionary
Utilities
Materials
Financials
Industrials
Staples
Energy
Technology
HealthCare
RelativeCAPERatioforValueInvesting Sectors
TheShillerBarclaysCAPEU.S.SectorIndexusestheRelativeCAPERatiotoselectthemost
undervaluedsectorsinthemarket
Source:BarclaysCapital,DoubleLine
Inthechart,theverticalaxisrepresentstheRelativeCAPERatio.Fordefinitions,pleaseseetheAppendixsectionofthis
presentation.Forillustrativepurposesonly.Anydataonpastperformance,modelingorbacktestingcontainedhereinisno
indicationastofutureperformance.SeeHistoricalIndexPerformanceDisclaimerintheAppendixsectionofthispresentation.DataRange:September2002 September2014
PortfolioweightsarereconstitutedonamonthlybasisusingtheRelativeCAPEratio
HistoricalSectorRotationofShillerBarclaysCAPE
U.S.SectorTotalReturnIndex
Source:BarclaysCapital,DoubleLine Capital.
Shiller BarclaysCAPEUSSectorTRUSDIndexincorporatestheprinciplesoflongterminvestingdistilledbyDr.RobertShiller andexpressedthroughtheCAPE(CyclicallyAdjusted
PriceEarnings)ratio(theCAPERatio).ItaimstoidentifyundervaluedsectorsbasedonamodifiedCAPERatio,andthenusesamomentumfactortoseektomitigatetheeffects
ofpotentialvaluetraps.Youcannotinvestdirectlyinanindex.PleasesetheAppendixforindexdefinitions.
ConsumerDiscretionary
ConsumerStaples
Energy
Financials
Healthcare
Industrials
Materials
Technology
Utilities
RealEstate
B
a
r
c
l
a
y
s
S
h
i
l
l
e
r
C
A
P
E
U
S
S
e
c
t
o
r
E
x
p
o
s
u
r
e
s
S
e
p
t
e
m
b
e
r
2
0
0
2
O
c
t
o
b
e
r
2
0
1
4
HistoricalSectorExposuresofShillerBarclaysCAPE
U.S.SectorTotalReturnIndex
Overthepast146months,theindexwasprimarilyallocatedtofivesectors:
Industrial:93%ofthetime
HealthCare:76%ofthetime
Energy:70%ofthetime
ConsumerStaples:68%ofthetime
Financial:56%ofthetime
Source:Barclays,DoubleLine.PleaseseetheAppendixforfurtherdefinitions.InceptionoftheShiller BarclaysCAPEUSSectorTotalReturnIndexwasSeptember4,2002.
Shiller BarclaysCAPEUSSectorTRUSDIndexincorporatestheprinciplesoflongterminvestingdistilledbyDr.RobertShiller andexpressedthroughtheCAPE(CyclicallyAdjustedPriceEarnings)ratio
(theCAPERatio).ItaimstoidentifyundervaluedsectorsbasedonamodifiedCAPERatio,andthenusesamomentumfactortoseektomitigatetheeffectsofpotentialvaluetraps.Youcannotinvest
directlyinanindex.
3
6
6
8
31
82
99
102
111
136
0 20 40 60 80 100 120 140 160
Materials
ConsumerDiscretionary
RealEstate
Utilities
Technology
Financial
ConsumerStaples
Energy
Healthcare
Industrial
NumberofMonthsInvested
WhyDoubleLineChoosesShillerBarclaysCAPEU.S.
SectorTotalReturnIndexOverTraditionalEquityIndices?
Identifiesandinvestsinrelativelyundervaluedequitysectors
Doesnotrelyonsubjectiveforecasts
Usesalongtermestimateofvalue,avoidingshorttermbias
IsbasedontherigorousresearchofProfessorRobertShillerandJohnCampbell
WhichinturnisbaseduponthevalueinvestingprinciplesofBenjaminGraham&
DavidDodd
WebelieveitisanIntelligentAlternativetoCapitalizationWeightedPortfolios(S&P500)
Source:BarclaysCapital,DoubleLine Capital
PleaseseetheAppendixfordefinitions.
TABIV
FixedIncomePortfolio
DoubleLineShiller
EnhancedCAPE
DoubleLine
ActivelyManaged
FixedIncome
Portfolio
ShillerBarclays
CAPEUSSector
TRUSDIndex
InitialInvestment
FixedIncomePortfolio
FixedIncomeInvestmentProcess
Investment
Outlook
Implementation
Economic
Discussions
AssetAllocationCommitteeholds
amonthlymeeting.Account
reviewandmarketsector
chartbookareevaluated.
FixedIncomeAssetAllocation
ChartBookreviewsportfolio
characteristics,returnanalysis,
andriskmeasures.
FixedIncomeAssetAllocation
Chartbookgraphicallydepicts
historicalassetclassspreadsand
relativegrowthtrendsinthe
globalfixedincomemarketplace.
Macroeconomicgroupdiscussion
ofinterestrates,currencies,
commodities,yieldcurve,spread
andgeneralfixedincomemarket
analysis.
Sectorswithopportunitiesare
identifiedbasedontheportfolio
managersassessmentoftheir
respectivesectorsoutlookand
sectorattractivenessrelativeto
otherassetclasses.
Strategyrisksarereviewed.
TheCommitteeproposesasset
allocationchanges.The
CommitteeChairmanmakesthe
finalassetallocationdecision.
Sectorteamsreviewclient
guidelinesandareresponsiblefor
securityselection.
TheAssetAllocationFixed
Incometeammonitors
implementationandperforms
portfolioanalytics.
Improving
Stable
Deteriorating
AssetAllocationFramework
ThedecisiontooverweightorunderweightasectorisdeterminedbytheDoubleLineFixedIncome
AssetAllocationCommittee.TheCommitteesdecisiontoover/underweightasectorisdrivenby
sectorvaluationandevolvingfundamentalconditions.
Overweight
Neutral
Underweight
QuantitativeProcess
Valuation
Cheap
Average
Rich
QualitativeProcess
FundamentalConditions
SmartAlpha
Thefixedincomeportfoliohasgeneratedarelativelyconsistentreturninadditiontothereturns
derivedfromtheShillerBarclaysCAPEindex
Thisconsistency,asopposedtochunkysourcesofalpha,iswhatdistinguishestheDoubleLine
doublevalueproposition
0.17%
0.02%
0.73%
0.59%
0.19%
0.44%
0.76%
0.40%
0.05%
0.61%
0.25%
0.40%
0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
Nov13 Dec13 Jan14 Feb14 Mar14 Apr14 May14 Jun14 Jul14 Aug14 Sep14
F
i
x
e
d
I
n
c
o
m
e
P
o
r
t
f
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l
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C
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i
b
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t
i
o
n
t
o
R
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t
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r
n
O
c
t
o
b
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r
3
1
,
2
0
1
3
S
e
p
t
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m
b
e
r
3
0
,
2
0
1
4
Pastperformanceisnoguaranteeoffutureresults.Indexperformanceisnotrepresentativeoffundperformance.
FixedIncomePortfolio SectorAllocation
Strivestobebroadlydiversifiedacrossfixedincomesectors
Source:DoubleLineCapital.RepresentativeportfoliosectorallocationisasofSeptember30,2014andissubjecttochangewithoutnotice.
Duration 1.8
Yield 3.9%
WeightedAverage Life 4.6
Coupon 4.6%
Cash
2.1%
U.S.Government
6.0%
AgencyResidential
MortgageBacked
Securities
2.7%
NonAgency
Residentail
MortgageBacked
Securities
17.5%
InvestmentGrade
Credit
9.5%
HighYieldCredit
4.5%
CommercialMortgage
BackedSecurities
13.6%
CollateralizedLoan
Obligations
18.4%
BankLoan
4.9%
International
Emerging
20.9%
FixedIncomePortfolio RatingsDistribution
AveragecreditqualityisBBB
Source:DoubleLineCapital.RepresentativeportfolioratingsdistributionisasofSeptember30,2014andissubjecttochangewithoutnotice.
AverageCreditRatingreferstotheaverageratingofthesecuritiesinthefixedincomeportfolioofthefund.Thefunditself,northefixedincomeportfolio,doesnothaveacreditrating.
Cash
2.1%
Government
6.1%
Agency
2.6%
Investment
Grade
47.9%
Below
Investment
Grade
39.8%
Unrated
1.5%
FixedIncomePortfolio DurationBuckets
Portfoliodurationis1.8years
Source:DoubleLineCapital.RepresentativeportfoliodurationallocationandoveralldurationisasofSeptember30,2014and is subjecttochangewithoutnotice.
2.1%
39.3%
28.7%
20.1%
7.0%
2.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Cash <1Year 13Years 3to5years 5to7years >7years
P
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F
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TABV
DoubleLineShiller EnhancedCAPEPerformanceMetrics
Source:
DoubleLineShiller
EnhancedCAPE
DoubleLine
ActivelyManaged
FixedIncome
Portfolio
Shiller Barclays
CAPEUSSector
TRUSDIndex
InitialInvestment
DoubleLineShillerEnhancedCAPE
Consumer
Discretionary
Consumer
Staples
Energy Financial Healthcare Industrial Materials Technology Utilities RealEstate
Nov13 Staples Energy Healthcare Industrial
Dec13 Staples Energy Healthcare Industrial
Jan14 Staples Energy Healthcare Industrial
Feb14 Staples Healthcare Industrial Technology
Mar14 Energy Financial Healthcare Technology
Apr14 Energy Healthcare Industrial Technology
May14 Energy Healthcare Industrial Technology
June14 Energy Healthcare Industrial Technology
July14 Energy Healthcare Industrial Technology
Aug14 Energy Healthcare Industrial Technology
Sep14 Energy Healthcare Industrial Technology
Oct14 Staples Healthcare Industrial Technology
BarclaysShillerCAPEUSSectorIndexExposures
November2013throughOctober2014
Source:Barclays,DoubleLineCapital
Fundholdingsandsectorallocationsaresubjecttochangeandnotarecommendationtobuyorsellanysecurity.
EnergySectorHadWorstPerformanceinthe3
rd
Quarter
June30,2014throughSeptember30,2014
Source:Bloomberg,DoubleLineCapital
*TotalReturn(notsumofsectorreturns)
0.26%
1.95%
8.62%
2.33%
5.46%
1.09%
0.22%
3.81%
3.96%
1.13%
10%
8%
6%
4%
2%
0%
2%
4%
6%
8%
S
&
P
5
0
0
S
e
c
t
o
r
R
e
t
u
r
n
s
J
u
n
e
3
0
,
2
0
1
4
S
e
p
t
e
m
b
e
r
3
0
,
2
0
1
4
DSEEXContributiontoReturn
June30,2014throughSeptember30,2014
Source:Bloomberg,DoubleLine
originalcost.Currentperformanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrenttothe
mostrecentmonthendmaybeobtainedbycalling213.633.8200orbyvisitingwww.doublelinefunds.com.
3.84%
2.21%
0.47%
1.82%
0.28%
0.13%
0.41%
1.13%
5%
4%
3%
2%
1%
0%
1%
2%
3%
C
o
n
t
r
i
b
u
t
i
o
n
t
o
R
e
t
u
r
n
J
u
n
e
3
0
,
2
0
1
4
S
e
p
t
e
m
b
e
r
3
0
,
2
0
1
4
CurrentlyinCAPEIndex
WasinCAPEIndexpreviously in2014
**TotalReturn,NotContributiontoReturn
DSEEX
Over/Under
Performance
1.54%
S&P500SectorPerformance
December31,2013throughSeptember30,2014
0.86%
7.23%
3.23%
7.42%
16.62%
2.87%
8.87%
14.11%
13.95%
8.34%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
S
&
P
5
0
0
S
e
c
t
o
r
R
e
t
u
r
n
s
D
e
c
e
m
b
e
r
3
1
,
2
0
1
3
S
e
p
t
e
m
b
e
r
3
0
,
2
0
1
4
Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturnandprincipalvalueofan
investmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthanoriginalcost.Currentperformanceofthefundmaybe
lowerorhigherthantheperformancequoted.Performancedatacurrenttothemostrecentmonthendmaybeobtainedbycalling213.633.8200orbyvisiting
www.doublelinefunds.com.
0.26%
0.44%
0.47%
3.83%
0.42%
4.09%
8.12%
3.02%
11.13%
8.34%
2%
0%
2%
4%
6%
8%
10%
12%
C
o
n
t
r
i
b
u
t
i
o
n
t
o
R
e
t
u
r
n
D
e
c
e
m
b
e
r
3
1
,
2
0
1
3
S
e
p
t
e
m
b
e
r
3
0
,
2
0
1
4
WasinCAPEIndexpreviously in2014
DSEEX
Over/Under
Performance
2.79%
S&P500SectorPerformance
October31,2013throughSeptember30,2014
6.80%
9.56%
7.38%
14.73%
23.12%
11.06%
15.60%
22.38%
12.82%
14.46%
0%
5%
10%
15%
20%
25%
S
&
P
5
0
0
S
e
c
t
o
r
R
e
t
u
r
n
s
O
c
t
o
b
e
r
3
1
,
2
0
1
3
S
e
p
t
e
m
b
e
r
3
0
,
2
0
1
4
October31,2013throughSeptember30,2014
originalcost.Currentperformanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrentto
themostrecentmonthendmaybeobtainedbycalling213.633.8200orbyvisitingwww.doublelinefunds.com.
0.28% 0.26%
0.49%
5.38%
2.38%
4.32%
13.10%
2.70%
15.80%
14.46%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
C
o
n
t
r
i
b
u
t
i
o
n
t
o
R
e
t
u
r
n
O
c
t
o
b
e
r
3
1
,
2
0
1
3
S
e
p
t
e
m
b
e
r
3
0
,
2
0
1
4
WasinCAPEIndexpreviously duringsampleperiod
DSEEX
Over/Under
Performance
1.34%
DSEEXPerformanceRelativetoMorningstarUniverse
Source:Morningstar
Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.
Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuatesothataninvestor'sshares,when
redeemed,maybeworthmoreorlessthanoriginalcost.Currentperformanceofthefundmaybeloweror
higherthantheperformancequoted.Performancedatacurrenttothemostrecentmonthendmaybeobtained
bycalling213.633.8200orbyvisitingwww.doublelinefunds.com.
1Month 1Q2014 2Q2014 3Q2014 YeartoDate
MorningstarLargeValue Category
Fund 2.69% 3.49% 7.84% 0.41% 11.13%
ExcessReturn+/ S&P500TRUSD 1.29% 1.68% 2.61% 1.54% 2.79%
ExcessReturn+/ Category 0.52% 1.21% 3.32% 0.14% 4.81%
DSEEXPerformanceRelativetoMorningstarUniverse
November1,2013throughSeptember30,2014
Source:Morningstar,Zephyr
Pastperformanceisnoguaranteeoffutureresults.
DSEEXSharpeRatioRelativetoMorningstarUniverse
November1,2013throughSeptember30,2014
Source:Morningstar,Zephyr
Pastperformanceisnoguaranteeoffutureresults.
TABVI
PortfolioManagementTeam
Government/
Municipals
GregoryWhiteley
GlobalDeveloped
Credit
BonnieBaha
RobertCohen
EmergingMarkets
LuzPadilla
MarkChristensen
SuFeiKoo
Mortgages
JeffreyGundlach
PhilipBarach
JoelDamiani
JosephGalligan
SamuelGarza
International
DevelopedSovereign
Debt
JeffreyGundlach
DoubleLineShillerEnhancedCAPEManagementTeam
EquityDerivatives
Management/Trading
JeffreySherman
SamuelLau
EricDhall
RobertHerron
JeffreyMayberry
SmartBeta,
MeetSmartAlpha
JeffreySherman,CFA
PortfolioManager
October21,2014
IndexDescriptions
Alpha() Ameasureofperformanceonariskadjustedbasis.Alphatakesthevolatility(pricerisk)ofamutualfundandcomparesitsriskadjustedperformanceto
abenchmarkindex.
Beta() Themeasureofamutualfund'svolatilityinrelationtothemarket.Bydefinition,themarkethasabetaof1.0,andindividualmutualfundsareranked
accordingtohowmuchtheydeviatefromthemarket.Abetaofabove1.0meansthefundswingsmorethanthemarket.Ifthefundmoveslessthanthemarket,
thebetaislessthan1.0.
BasisPoint Abasispointisaunitthatisequalto1/100
th
of1%,andisusedtodenotethechangeinafinancialinstrument.
ShillerBarclaysCAPEU.S.SectorIndex Anindexthattakesalongpositionin4favoredsectorsthatareundervaluedandpossessrelativelystrongerprice
momentumoverthepast12months.Eachmonth,theindexranksthe10U.S.sectorsbasedonmodifiedCAPEratioand12monthpricemomentum,equally
allocatingacrossthetop4rankedsectors.
SharpeRatio Arewardtovariabilityratioandameasureoftheexcessreturn(orRiskPremium)perunitofriskinaninvestmentassetoratradingstrategy.
MorningstarLargeValueCategory LargevalueportfoliosinvestprimarilyinbigU.S.companiesthatarelessexpensiveorgrowingmoreslowlythanotherlarge
capstocks.Stocksinthetop70%ofthecapitalizationoftheU.S.equitymarketaredefinedaslargecap.Valueisdefinedbasedonlowvaluations(lowprice
ratiosandhighdividendyields)andslowgrowth(lowgrowthratesforearnings,sales,bookvalue,andcashflow).
WeightedAverageLife(WAL) Theaveragenumberofyearsforwhicheachdollarofunpaidprincipalonaloanormortgageremainsoutstanding.Oncecalculated,
WALtellshowmanyyearsitwilltaketopayhalfoftheoutstandingprincipal.
Duration Durationisacommonlyusedmeasureofthepotentialvolatilityofthepriceofadebtsecurity,ortheaggregatemarketvalueofaportfolioofdebt
securities,priortomaturity.Securitieswithalongerdurationgenerallyhavemorevolatilepricesthansecuritiesofcomparablequalitywithashorterduration.
S&P500TRIndex Isafreefloatcapitalizationweightedindexpublishedsince1957ofthepricesof500largecapcommonstocksactivelytradedintheUnited
States.
StandardDeviation Sigma=standarddeviation.Itshowshowmuchvariationthereisfromtheaverage(mean,orexpected/budgetedvalue).Alow standard
deviationindicatedthatthedatapointtendtobeveryclosetothemean,whereashighstandarddeviationindicatedthatthe dateisspreadoutoveralargerange
ofvalues.
BelowInvestmentGrade Referstoasecuritythatisratedbelowinvestmentgrade.Thesesecuritiesareseenashavinghigherdefaultriskorotheradversecredit
events,buttypicallypayhigheryieldsthanbetterqualitybondsinordertomakethemattractive.Theyarelesslikelytopayback100centsonthedollar.
InvestmentGrade Referstoabondconsideredinvestmentgradeifit'screditratingisBBB orhigherbyStandard&Poor'sorBaa3orhigherby Moody's.Ratings
arebasedonacorporatebondmodel.Thehighertheratingthemorelikelythebondwillpaybackpar/100centsonthedollar.
CAPERatio(CyclicallyAdjustedPricetoEarnings) Ameasureofthepriceofacompany'sstockrelativetoaverageearningsgrowthoverthepast10years.
HistoricalIndexPerformanceDisclaimer
BarclaysCapitalInc.anditsaffiliates("Barclays")isnottheissuerorproducerofDoubleLines Shiller EnhancedCAPE
(theStrategy)andBarclayshasno
responsibilities,obligationsordutiestoinvestorsinthestrategy.TheShiller BarclaysCAPE
USSectorUSDIndex(theIndex)isatrademarkownedby
BarclaysBankPLCandlicensedforusebytheStrategy.WhiletheStrategymayexecutetransaction(s)withBarclaysinorrelatingtotheIndex,Strategy
investorsacquireinterestssolelyusingthestrategyandinvestorsneitheracquireanyinterestintheIndexnorenterintoany relationshipofanykind
whatsoeverwithBarclaysuponmakinganinvestmentintheStrategy.TheStrategyisnotsponsored,endorsed,soldorpromoted by BarclaysandBarclays
makesnorepresentationregardingtheadvisabilityoruseoftheIndexoranydataincludedtherein.Barclaysshallnotbeliableinanywaytoinvestorsorto
otherthirdpartiesinrespectoftheuseoraccuracyoftheIndexoranydataincludedtherein.
TheShiller BarclaysCAPE
USIndexFamily(theIndexFamily)hasbeendevelopedinpartbyRSBBI,LLC,theresearchprincipalofwhichisRobertJ.Shiller.
RSBBI,LLCisnotaninvestmentadvisoranddoesnotguaranteetheaccuracyandcompletenessoftheIndexFamilyoranydataor methodologyeither
includedthereinoruponwhichitisbased.RSBBI,LLCshallhavenoliabilityforanyerrors,omissionsorinterruptionsthereinandmakesnowarranties
expressedorimplied,astotheperformanceorresultsexperiencedbyanypartyfromtheuseofanyinformationincludedtherein oruponwhichitisbased,
andexpresslydisclaimsallwarrantiesofthemerchantabilityorfitnessforaparticularpurposewithrespectthereto,andshallnotbeliableforanyclaimsor
lossesofanynatureinconnectionwiththeuseofsuchinformation,includingbutnotlimitedto,lostprofitsorpunitiveorconsequentialdamageseven,if
RSBBI,LLCisadvisedofthepossibilityofsame.
BarclaysDisclaimer
Disclaimer
ImportantInformationRegardingThisReport
Issueselectionprocessesandtoolsillustratedthroughoutthispresentationaresamplesandmaybemodifiedperiodically.Suchchartsarenottheonlytoolsused
bytheinvestmentteams,areextremelysophisticated,maynotalwaysproducetheintendedresultsandarenotintendedforusebynonprofessionals.
DoubleLinehasnoobligationtoproviderevisedassessmentsintheeventofchangedcircumstances.Whilewehavegatheredthisinformationfromsources
believedtobereliable,DoubleLinecannotguaranteetheaccuracyoftheinformationprovided.Securitiesdiscussedarenotrecommendationsandarepresented
asexamplesofissueselectionorportfoliomanagementprocesses.Theyhavebeenpickedforcomparisonorillustrationpurposesonly.Nosecuritypresented
withiniseitherofferedforsaleorpurchase.DoubleLinereservestherighttochangeitsinvestmentperspectiveandoutlook withoutnoticeasmarketconditions
dictateorasadditionalinformationbecomesavailable.
ImportantInformationRegardingRiskFactors
Investmentstrategiesmaynotachievethedesiredresultsduetoimplementationlag,othertimingfactors,portfoliomanagementdecisionmaking,economicor
marketconditionsorotherunanticipatedfactors.Theviewsandforecastsexpressedinthismaterialareasofthedateindicated,aresubjecttochangewithout
notice,maynotcometopassanddonotrepresentarecommendationorofferofanyparticularsecurity,strategy,orinvestment. Pastperformanceisno
guaranteeoffutureresults.
ImportantInformationRegardingDoubleLine
Inpreparingtheclientreports(andinmanagingtheportfolios),DoubleLineanditsvendorspriceseparateaccountportfolio securitiesusingvarioussources,
includingindependentpricingservicesandfairvalueprocessessuchasbenchmarking.
ToreceiveacomplimentarycopyofDoubleLinescurrentFormADVPartII(whichcontainsimportantadditionaldisclosureinformation),acopyoftheDoubleLines
proxyvotingpoliciesandprocedures,ortoobtainadditionalinformationonDoubleLinesproxyvotingdecisions,pleasecontact DoubleLinesClientServices.
ImportantInformationRegardingDoubleLinesInvestmentStyle
DoubleLineseekstomaximizeinvestmentresultsconsistentwithourinterpretationofclientguidelinesandinvestmentmandate.WhileDoubleLineseeksto
maximizereturnsforourclientsconsistentwithguidelines,DoubleLinecannotguaranteethatDoubleLinewilloutperformaclient'sspecifiedbenchmark.
Additionally,thenatureofportfoliodiversificationimpliesthatcertainholdingsandsectorsinaclient'sportfoliomayberisinginpricewhileothersarefalling;or,
thatsomeissuesandsectorsareoutperformingwhileothersareunderperforming.Suchoutorunderperformancecanbetheresultofmanyfactors,suchasbut
notlimitedtoduration/interestrateexposure,yieldcurveexposure,bondsectorexposure,ornewsorrumorsspecifictoasinglename.
DoubleLineisanactivemanagerandwilladjustthecompositionofclientsportfoliosconsistentwithourinvestmentteamsjudgmentconcerningmarket
conditionsandanyparticularsecurity.TheconstructionofDoubleLineportfoliosmaydiffersubstantiallyfromtheconstruction ofanyofavarietyofbondmarket
indices.Assuch,aDoubleLineportfoliohasthepotentialtounderperformoroutperformabondmarketindex.Sincemarketscanremaininefficientlypricedfor
longperiods,DoubleLinesperformanceisproperlyassessedoverafullmultiyearmarketcycle.
ReferencestootherFundsshouldnotbeinterpretedasanofferofthosesecurities.
Diversification doesnotassureaprofitorprotectagainstalossinadecliningmarket.
Opinionsexpressedaresubjecttochangeatanytime,arenotaguaranteeandshouldnotbeconsideredinvestmentadvice.
2014DoubleLineCapitalLP
SmartBeta,
MeetSmartAlpha
JeffreySherman,CFA
PortfolioManager
October21,2014
Announcements
WebcastNews
LuzPadilla November13,2014
DoubleLine EmergingMarketsFixedIncomeFundandLowDurationEmergingMarketsFund
1:15pmPDT/4:15pmEDT
PhilipBarach November25,2014
DoubleLine LowDurationBondFund
1:15pmPDT/4:15pmEDT
JeffreyGundlach December9,2014
DoubleLine TotalReturnBondFundandCoreFixedIncomeFund
1:15pmPDT/4:15pmEDT
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