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JeffreyGundlach
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June4,2013
FundOfferings
TotalReturnBondFund RetailandInstitutionalClass NoLoadMutualFund Retail Inst. Nshare Ishare Ticker MinInvestment MinIRAInvestment GrossExpenseRatio DLTNX $2,000 $500 0.76% DBLTX $100,000 $5,000 0.51% Ticker MinInvestment MinIRAInvestment Gross ExpenseRatio CoreFixedIncomeFund RetailandInstitutionalClass NoLoadMutualFund Retail Inst. Nshare Ishare DLFNX $2,000 $500 0.80% DBLFX $100,000 $5,000 0.55%
Performance
DoubleLineTotalReturnBondFund QuarterEndingMarch31,2013
SinceInception 1Year Annualized Annualized (4610to33113) 7.37% 12.24% 7.11% 11.95% 3.77% 5.75%
March 0.30% 0.19% 0.08% Ishare 3.97% 3 97% 3.97% Ishare 0.51%
1Q2013 1.27% 1.12% 0.12% Nshare 3.72% 3 72% 3.72% Nshare 0.76%
MorningstarIntermediateTermBondFundRankings* AsofMarch31, ,2013 Ishare Nshare 1Year(AbsoluteRank) 231of1,157 267of1,157 1Year(%Rank) 20% 23% Fortheperiodending33113,MorningstarrankedtheTotalReturn BondFundinthe20thand23rdpercentile(fortheIandNshareclasses, respectively)amongthe1 1,157 157FundsintheIntermediateTermBondFund categorybasedontotalreturns.
GrossExpenseRatio
Performance
DoubleLineCoreFixedIncomeFund QuarterEndingMarch31,2013
March Ishare Nshare BarclaysUSAggregateIndex AsofMarch31,2013 GrossSEC30DayYield NetSEC30DayYield 0.23% 0.21% 0.08% Ishare 3.28% 3.28% Ishare 0.55%
MorningstarIntermediateTermBondFundRankings*
AsofMarch31,2013 Ishare Nshare 1Year(AbsoluteRank) 363of1157 403of1157 GrossExpenseRatio 1Year(%Rank) 32% 35% Fortheperiodending33113,MorningstarrankedtheCoreFixedIncome BondFundinthe32ndand35thpercentile(fortheIandNshareclass, respectively)amongthe1,157FundsintheIntermediateTermBondFund categorybasedontotalreturns. Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturnandprincipal valueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheoriginalcost.Current performanceofthefundmaybelowerorhigherthantheperformancequoted quoted.Performancedatacurrenttothemostrecentmonthendmaybe obtainedbycalling2136338200orbyvisitingwww.doublelinefunds.com.
BarclaysUSAggregateIndexrepresentssecuritiesthatareSECregistered,taxable,anddollardenominated.Theindexcoversthe USinvestmentgradefixedrate bondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbackedsecurities.Thesemajorsectors aresubdividedintomorespecificindicesthatarecalculatedandreportedonaregularbasis.Itisnotpossibletoinvestinanindex. PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.Aninvestmentcannotbemadeinanindex. g rankings g (% ( Rank) )represent p afund'stotalreturnp percentilerankrelativetoallfundsthathavethesameMorningstar g category. g y Thehighest g *Morningstar percentilerankis1andthelowestis100.MorningstarRankings(Absolute)representafundstotalreturnrankrelativetoall fundsthathavethesameMorningstar Category.Thehighestrankis1andthelowestisbasedonthetotalnumberoffundsinthecategory.ItisbasedonMorningstar totalreturn,whichincludesboth incomeandcapitalgainsorlossesandisnotadjustedforsaleschargesorredemptionfees. 2013MorningstarInc.AllRightReserved.Theinformationcontainedherein:(1)isproprietarytoMorningstar;(2)maynotbecopiedordistributed;and(3)isnot 3 warrantedtobeaccurate,completeortimely.NeitherMorningstarnoritscontentprovidersareresponsibleforanydamagesorlossesarisingfromanyuseofthis information.
LuzPadilla July23,2013
EmergingMarketsFixedIncome 1:15pmPDT/4:15pmEDT
JeffreyGundlach September10,2013
TotalReturn&CoreFixedIncome 1:15pmPDT/4:15pmEDT
June4,2013
TABI
Eurozone
GDPGrowth,2013forecasts(%)
GlobalGDPGrowth
GlobalGDPGrowth
Eurozone 5YearRecession
January1,2008throughMarch31,2013
10
Eurozone Unemployment
December 31,1998throughApril30,2013
30
Portugal
EurozoneUnemployme entRate December31 1,1998throughApril30,2013 25
20
15
10
Source:Bloomberg,DoubleLine Capital
11
60
Eurozon neUnemploymentR RateUnder25 December r31,1998throughMarch31,2013
Greece E Eurozone
50 40 30 20 10 0
Source:Bloomberg,DoubleLine Capital
12
10YearSovereignDebtYieldsvs.GermanBunds
January1,2010throughJune3,2013
40%
Portugal
10YearSovereignDebtYieldSpre eadtoGermanBund January01,2010throughJune03,2013
Italy S i Spain
Ireland
35%
G Greece
30% 25% 20% 15% 10% 5% 0% Jan10 Mar10 May10 Sep10
Jan11
Mar11
May11
Sep11
Jan12
Mar12
May12
Sep12
Jan13
Mar13
May13
Jul10
Nov10
Jul11
Nov11
Jul12
Nov12
13
TABII
U.S.
0.5
1.5
2.5
0
Au ug 98 Jan99 un99 Ju No ov99 Ap pr 00 Se ep 00 Fe eb 01 Ju ul 01 De ec01 Ma ay 02 Oc ct 02 Ma ar 03 Au ug 03 Jan04 un04 Ju No ov04 Ap pr 05 Se ep 05 Fe eb 06 Ju ul 06 De ec06 Ma ay 07 Oc ct 07 Ma ar 08 Au ug 08 Jan09 un09 Ju No ov09 Ap pr 10 Se ep 10 Fe eb 11 Ju ul 11 De ec11 Ma ay 12 Oc ct 12 Ma ar 13
Source:St.LouisFederalReserveBank
August 31,1998throughApril30,2013
10YearForwardBreakevenInflationRate
15
ConsumerPriceIndex(CPI)
January31,1958throughApril30,2013
16 14 12
70% 100%
90%
CPIexcludin ngFood& Energ gyYoY %Change e (Januar ry31,1958 Apr ril 30,2013)
80%
10 8 6 4
60%
50%
40%
30%
20%
2 0
Jan58 Oct59 Jul 61 Apr63 Jan65 Oct66 Jul 68 Apr70 Jan72 Oct73 Jul 75 Apr77 Jan79 Oct80 Jul 82 Apr84 Jan86 Oct87 Jul 89 Apr91 Jan93 Oct94 Jul 96 Apr98 Jan00 Oct01 Jul 03 Apr05 Jan07 Oct08 Jul 10 Apr12
10%
0%
16
DebtType(Asa%ofGDP)
January1,1981throughDecember31,2012
300% TotalUSDebt 250% Business Government Deb bt asaPercenta ageofGDP (19812012 2) Households Financial TotalPrivate
200%
150%
100%
50%
0%
Germany
17
StockMarketFollowsFederalReserveBalanceSheet
Source:Gluskin Sheff,BusinessInsider,May5th,2013http://www.businessinsider.com/davidrosenbergbernankewizardpotemkinmauldinpresentation20135?op=1
18
DeficitsExcludingInterestExpenseEstimates(E)
$1.00
($inTrillio ons)
$0.50
19
AverageTreasuryInterestRateEstimates(E)
7% 6% 5% 4% 3% 2% 1% 0% 2012 2013 2014(E) 2015(E) 2016(E) 2017(E)
20
Source:Bloomberg,DoubleLine
USDebt,Deficit&InterestExpenseEstimates(E)
$26 $24 $22 $25 94 $25.94 InterestExpense Deficitex.InterestExpense Debt $21.27 $19.41 $17.81 $16.43
0.36 0.97 0.38 1.00 0.6 1.00 0.86 1.00 1.51
$23.43
6 1.16 1.00
1.00
($inTrillio ons)
2014(E)
2015(E)
2016(E)
2017(E)
21
Deficit=Theamountbywhichexpensesexceedincomeorcostsoutstriprevenues. InterestExpense=Theamountreportedbyacompanyorindividualasanexpenseforborrowed money. U.S.Debt=The UnitedStatesdebt istheoutstandingamountowedbythe federalgovernmentoftheUnitedStates fromtheissueof securities bythe Treasury andother federalgovernmentagencies. Bloomberg,DoubleLine
CorporateIncomeTaxRates
January1,1947throughDecember31,2011
Source:BungalowBillsConservativeWisdom,May10,2011http://bungalowbillscw.blogspot.com/2011/05/corporatetaxratesinunitedstates.html OECD=OrganizationforEconomicCooperationandDevelopment
22
CorporateIncomeTaxRates
January1,1947throughDecember31,2012
23
CorporateProfitsHitAllTimeHighAs%ofGDP
January1,1947throughMarch31,2012
0.11 0.10 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 Jan47
CorporateProfits/NominalGDP C
Jan57
Jan67
Jan77
Jan87
Jan97
Jan07
CorporateProfitabilityByIndustry
CorporateTaxRatesByIndustry
U.S.MedianHouseholdIncomeStagnant
AsofDecember31,2011.Source:Bloomberg
27
USPersonalIncomeLessCurrentTransferReceipts
December1,2001throughMarch30,2013
11000 10500 PersonalIncome/IncomeLessReceip ptsIndexValueRea al ember2001 March h2013 Dece 10000 9500 800 9000 8500 8000 400 7500 7000 200 6500 6000 De ec01 De ec02 De ec03 De ec04 De ec05 De ec06 De ec07 De ec08 De ec09 De ec10 De ec11 Au ug02 Au ug03 Au ug04 Au ug05 Au ug06 Au ug07 Au ug08 Au ug09 Au ug10 Au ug11 Au ug12 De ec12 Ap pr02 Ap pr03 Ap pr04 Ap pr05 Ap pr06 Ap pr07 Ap pr08 Ap pr09 Ap pr10 Ap pr11 Ap pr12 0 600 TransferReceipts(RHS) PersonalIncome(LHS) USPersonalIncomelessCurrentTransferReceipts(Real) 1000 1200
Source:BureauofEconomicAnalysis,DoubleLine Capital Disposablepersonalincome. Totalaftertaxincomereceivedby persons;itistheincomeavailableto persons forspendingorsaving. Relatedterms: Personalconsumption expenditures(PCE), Personalincome, Personalsaving. Personalcurrenttransferreceipts. Consistsofincomepaymentsto persons forwhichnocurrent services areperformedandnetinsurancesettlements.Itisthesumof government socialbenefits andnet currenttransferreceipts frombusiness.
28
AverageHourlyEarnings
January1,1985throughApril30,2013
Source:St.LouisFederalReserveBank
29
USUnemploymentRateandEmploymentto PopulationRatio
December31, 31 1990throughApril30, 30 2013 66 12
64
EmploymenttoPopulationRatio(%) 1,1990 April30, ,2013) December31
10
USUnem mploymentRate(% %) December31,1990 April30,2013) 30
62
60
58
56
USEmploymenttoPopulationRatio(LHS) USUnemploymentRate(RHS)
54
Unemployment
January1,2001throughMarch31,2013
Source:BusinessInsider,May5th,2013http://www.businessinsider.com/davidrosenbergbernankewizardpotemkinmauldinpresentation20135?op=1
31
LaborParticipationRatesbyAgeGroup
January1,1990through2020ProjectedEstimates
Source:CalculatedRiskBlog http://www.calculatedriskblog.com/2012/10/understandingdeclineinparticipation.html
32
GallupOpinionPoll
January1,1991throughMarch31,2013
Source:http://www.ritholtz.com/blog/wpcontent/uploads/2013/05/retire.jpg
33
GallupOpinionPoll
January1,1991throughMarch31,2013 Surveyofpercentageofpeoplethatbelievetheywillretirebeforeage65,atage65orovertheage of65
Source:http://www.ritholtz.com/blog/wpcontent/uploads/2013/05/retire2.jpg
34
LaborParticipation
January1,2001throughMarch31,2013 Ifeducatedlaborparticipationisfalling,wherewillskilledlaborcomefromintheU.S?
Source:Gluskin Sheff,BusinessInsider,May5th,2013http://www.businessinsider.com/davidrosenbergbernankewizardpotemkinmauldinpresentation20135?op=1
35
TABII
Bloodless Verdictof ftheMarket
BofA/MerrillFixedIncomeIndexReturns
Grey=Year2012 Blue=YearToDate2013
Convertibles(VOSO) HighYield(JOAO) InternationalEmerging(IGOV) 3.30% Corporate(COAO) 0.50% InternationalDeveloped(NOGO) Mortgages(MOAO) 1.17% Government(G0A0) 1.04% 3.28% 0.31% 2 59% 2.59% 2.19% 3 84% 3.84% 13.63% 12.00% 15.44% 18.30% 9.52%
DataSource:BofA/MerrillLynchIndicesthroughyearendDecember31,2012andJune3,2013fortherespectiveyearsindicated. PleaseseetheAppendixforindexdefinitions.Aninvestmentcannotbemadedirectlyinanindex.
37
BofA/MerrillFixedIncomeIndexReturns
Grey=Y G Year2012 Blue=YearToDate2013
CCCRatedHighYield(JOA3) BBRatedHighYieldCredit(JOA1) BRatedHighYield(JOA2) BBBRatedCredit(COA4) ARatedCredit(COA3) 0.09% 0.80% 19.70% 7.70% 14.36% 2.62% 3.63% 15.03% 11.98% 9.82% 3.97%
AAARatedCredit(COA1) 1.60%
InvestmentGrade=IndicesratedAAAtoBBB (shownabove)areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB or higherbyStandard&PoorsorBaa3byMoodys.Thehighertherating,themorelikelythebondistopaybackatpar/$100cents onthedollar.AAAisconsideredthehighest quality lit and dth thel lowest td degreeof frisk. i k Th Theyareconsidered id dt tob bestable t bl and dd dependable. d bl BelowInvestmentGrade=Alsoknownasjunkbond(shownabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopay backatpar/$100centsonthedollar. Source:BofA/MerrillLynchIndices asofDecember31,2012andJune3,2013andfortheirrespectiveyearsindicated. PleaseseeappendixforIndexdefinitions Aninvestmentcannotbemadedirectlyinanindex.
38
GlobalEquityPerformance PriceReturn
January1,2013throughJune4,2013
GlobalEquityPerformance
(YTDPriceReturn)
28.00% 23.00% 18.00% 13.00% 8 85% 8.85% 8.00% 3.00% 2.00% 7.00% 12.00% 17.00% 5.97% 11.50% 7.68% 4.48% 1.33% 0.37% 0 37% 0.95% 16.41% 16.62% 14.77% 10.64% 27.58%
15.02%
1.65%
39
U.S.Bond,Currency,andCommodityPerformance TotalReturn
January1 1,2013throughJune4, 4 2013
USBond,Currency,andCommoditiesPerformance1
(YTDTotalReturn)
15.00% 10.00% 5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 30 00% UST10yr UST30yr DXY EUR JPY Copper Gold CrudeOil NatGas Wheat Corn CRBIndex VIX 12.88% 16.05% 2.02% 5.28% 8.04% 10.49% 0.89% 0.35% 3.75% 3.43% 9.66% 3.62% 12.52%
Source:Bloomberg;DoubleLine DXY=USDollarspotprice,EUR=Eurospotprice,JPY=JapaneseYenspotprice Copper,Gold,CrudeOilandNaturalGasarequotedinspotprices.WheatandCornarequotedinunitsperbushel. CRB=TheTR/JCRBCommodityExcessReturnIndexisanarithmeticaverageofcommodityfuturespriceswithmonthlyrebalancing. VIX=MarketVolatilityIndex,apopularmeasureoftheimpliedvolatilityofS&P500indexoptions. Notes:(1)ReturnsYTDendingJune4,2013;(2)BasedonBofA MerrillLynchCurrent10yrUSTIndex;(3)BasedonBofA MerrillLynchCurrent30yrUST Index;(4)BasedonS&PGSCIIndexrepresentingasinglenamecommodityExcessReturn. UST10and30,S&PGSCI=PleaseseetheappendixforIndexdefinitions. Youcannotinvestdirectlyinanindex.
40
GlobalEquityPerformance PriceReturninUSDollars(USD)
January1,2013throughJune4,2013
GlobalEquityPerformance
(YTDPriceReturninUSD)
20.00% 15 02% 15.02% 15.00% 10.00% 5.00% 0.00% 5.00% 4.96% 10.00% 15.00% 15.30% 20.00% 1.80% 4.91% 9 % 2.03% 1.71% 16.41% 14 77% 14.77% 10.66% 7.71% 6.76% 4.46% 3 03% 3.03% 16.62%
41
PerformanceSinceInceptionQE2
October4,2011throughJune3,2013
42
WhatDidtheAggregateQEprogramsGiveus?
QE=QuantitativeEasingprograms.
Source:Bloomberg,DoubleLine Capital PleaseseeAppendixforS&P500definition.Youcannotinvestdirectlyinanindex.
43
WhatDidtheAggregateQEprogramsGiveus?
QE=QuantitativeEasingprograms.
Source:Bloomberg,DoubleLine Capital USTreasuryperformanceasmeasuredbytheBofA/MerrillLynchUSTreasury(GOQO)index.PleaseseeAppendixforindexdefinition.Youcannotinvest directlyinanindex
44
ShanghaiIndex
December31,2009throughJune4,2013
45
GoldSpotIndex
YearEnd2007throughJune4,2013
Source:BloombergFinancialServices,DoubleLineCapitalLP Aninvestmentcannotbemadedirectlyinanindex.
46
CRBCommodityIndex
YearEnd2007throughJune3,2013
47
TABIII
HousingandMBSMarketTrends
MortgageRefinancingIndex
January4,2002throughMay24,2013
4949
30YearU.S.MortgageRates
December31,2007throughJune3,2013
5050
HomePriceIndexLevelsandYearOverYearChange
January1,2000andJanuary1,2001throughMarch31,2013
Source:BloombergFinancialServices,CaseShiller S& /C Shiller S&P/Case Shill Home H Price i Index I d i iscomprised i dof fprice i changes h within i hi the h f following ll i subset b of f20metropolitan li markets: k 10City Ci Index I d Boston,Chicago, Chi Denver,Las L Vegas, V Los L Angeles,Miami,NewYork,SanDiego,SanFranciscoandWashingtonDC.Inadditiontothe10CityIndexitincludes:Atlanta,Charlotte,Cleveland,Dallas,Detroit,Minneapolis, Phoenix,Portland,Seattle,andTampa. CoreLogicNationalHousingPriceIndex(HPI)=CoreLogicisaleadingproviderofinformationandanalytics.Thisindexcovers 6,208zipcodes,572statisticalareasand1,027 countieslocatedinall50statesandDistrictofColumbia.Itisanationalaverage. Aninvestmentcannotbemadedirectlyinanindex.
51
51
ABXAAA071Index
January1,2010throughJune4,2013
52
NonAgencyRMBS60++DelinquencyRate
January31,2005throughApril30,2013
60%
37.7%
40%
30%
22.4%
20%
10.7%
10%
0%
53
NonAgencyRMBSConditionalDefaultRate
January31,2005throughApril30,2013
18% 16% 14%
CDR Ja anuary2005throug ghApril2013
12% 10% 8% 6% 4% 2% 0%
8.3%
7.9%
3.7%
Serious i Delinquencies li i is i defined d fi dby b mortgagesthat h are60++delinquency d li ratesdefined d fi dasloans l 60or90days d late l in i mortgagepayments,oralready l d i inforeclosure f l orREO status. PrimedefinedasFICO>725andLTV<75 AltAdefinedasFICO675725;orFICO>725andLTV>=75 SubprimedefinedasFICO<675 Source:LoanPerformance,Vichara,DoubleLineCapitalasofApril30,2013.
54
NonAgencyRMBSLossSeverity
January y31, ,2005through g April p 30, ,2013
90% 80% 70% LossSeverity y January2005throughApril2013 60% 50% 40% 30% 20% 10% 0%
57.7% 44.8%
55
NonAgencyRMBSConditionalRepaymentRate
January31,2005throughApril30,2013
45% 40% 35%
CRR January2005throu J ughApril2013
30% 25%
20.0%
20% 15% 10% 5% 0%
9.0% 3.1%
56
TABIV
DoubleLine bl i Funds d Overview i
TotalReturnBondFundPortfolioStatistics
Total Return BondFund AveragePrice Duration Average Life $100.40 2.63 4.16
PortfoliostatisticsasofApril30,2013basedonmarketweightedaverages.Subjecttochangewithoutnotice. Averageprice=Ameasureoftheweightedaveragepricepaidforthesecuritiescalculatedbytakingthepricesanddividingbythenumberofsecuritiesanddoesnotincludecash. Averagepriceshouldnotbeconfusedwithnetassetvalue. AverageDuration =Durationisusedasariskmeasure.Itmeasuresthepricevolatilityofasecuritygivenachangeininterestratemovements. g Life=Theaverage g numberofy yearsthateachdollarofunpaid p p principal p dueonthemortgage g g remainsoutstanding. g Average g lifeiscomputed p astheweighted g average g timeto Average thereceiptofallfuturecashflows,usingastheweightsthedollaramountsoftheprincipalpaydowns. Source:DoubleLineCapitalLP
58
TotalReturnBondFundPortfolioComposition BySecurityType
Other 2.9% Cash 15.0% Government 4.8% CMBS 5.7%
NonAgency 25.8%
Agency 45.8%
PortfoliocompositionasofMay31,2013.Subjecttochangewithoutnotice. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity. Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalance sheetsthatmayincludesecuritiesthatmaturewithin90days. Government U.S.treasurysecurities. Agency=MortgagesecuritieswhoseprincipalandinterestguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC). NonAgency=ResidentialMortgagesBondSecuritiesareatypeofbondbackedbyresidentialmortgages.NonAgencymeanstheywereissuedby aprivateissuer. CMBS =CommercialMortgageBackedSecurities.Securitizedloansmadeoncommercialratherthanresidentialproperty. Other=CollateralizedMortgageObligations(CLOs)
59
TotalReturnBondFundPortfolioComposition ByCollateralizeMortgageObligation(CMO)SecurityType
IOCurrent, IOLocked, 0.9% 0.0%
CMOLocked, 10.5%
AgencyCMOComposition
P tf li composition Portfolio iti asof fMay M 31, 31 2013 2013. Subject S bj tto t change h without ith tnotice. ti Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity. Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalance sheetsthatmayincludesecuritiesthatmaturewithin90days. PassThrough=MortgagepassthroughsecuritieswhoseprincipalandinterestguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC)ornon agencyprivateissuewithnogovernmentguarantee. g g Obligation g (CMO) ( )isafinancialdebtvehicle/special /p purpose p p entity ycalledapool. p Investorsbuy ybondsissuedby ytheentity yandreceivepayments p y CMOCurrent=CollateralizedMortgage accordingtoadefinedsetofrules.Themortgagesthemselvesarethecollateral,thebondsarethetranches(alsocalledclasses),andthesetofrulesthatdictateshowmoneyisreceived fromthecollateralwillbedistributediscalledthestructure.Thelegalentity,collateralandstructurearecollectivelyreferredtoasthedeal. IO =InterestOnlymortgagepoolsinwhichtheborrowersmonthlypaymentisonlytowardtheinterestontheloan.Anonamortized loan. InverseFloater=Amortgagepoolthathasayieldthatisinverselyrelatedtointerestrates. 60 IOCurrentpay =Loansthatarecurrentlyreceivingprincipalpayments. LockedOut/CMOLockedOut=Loansthatforasetperiodoftimewillnotreceiveprincipalpayments.
AAA 87%
Portfoliocompositionandcreditratingsasofsecurityorigination.Portfoliocompositionissubjecttochangewithoutnotice.TherearesomenonratedsecuritiesintheFundasshown inthegraphabove.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognized StatisticalRatingOrganization(S&P,Moodys,andFitch). InvestmentGrade=SecuritiesratedAAAtoBBB areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB orhigherbyStandard& PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikelythebondistopayback atpar/$100 $ centsonthedollar.AAAisconsideredthe highestqualityandthelowestdegreeofrisk.Theyareconsideredtobeextremelystableanddependable. BelowInvestmentGrade=AlsoknownasjunkbondisasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskor otheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinordertomakethemattractive.They arelesslikelytopaybackatpar/$100centsonthedollar. 61 NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies. CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund. Source:DoubleLineCapitalLPasofMay31,2013.
TotalReturnBondFundPortfolio NonAgencyRMBSBreakdownByCurrentCreditQuality
AA+ AAA A BBB+ 0% 0%AA A0% 3% A+ 0% 1% BBB BBB 2% 1% 0% BB+ 3% BB 1% BB 1% B+ 2% B 3% CCC+ 6% B 3%
NR 9%
D 16%
C 0%
CC 11%
PortfoliocompositionasofMay31,2013.Portfoliocompositionissubjecttochangewithoutnotice.Therearesomenonratedsecuritiesintheportfolioasshowninthechartabove. CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch). InvestmentGrade=SecuritiesratedAAAtoBBB (showninblueabove)areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB of higherbyStandard&PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikely thebondistopaybackatpar/$100centsonthedollar. AAAis i considered id dthe h highest hi h quality li and dthe h lowest l degree d of frisk. i k Th Theyareconsidered id dtob beextremely l stable bl and ddependable. d d bl BelowInvestmentGrade=Alsoknownasjunkbond(showningreyabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopaybackat par/$100centsonthedollar. CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund. NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies. Source:DoubleLineCapitalLP
62
TotalReturnBondFundPortfolio NonAgencyRMBSBreakdownByPrice
NonAgencyPriceBreakdown
8.0% 7.0% 6.0%
%ofFund
DollarPrice
PortfoliopricecompositionasofMay31,2013.Subjecttochangewithoutnotice. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.
63
CoreFixedIncomeFundPortfolioStatistics
PortfoliostatisticsasofApril30,2013basedonmarketweightedaverages.Subjecttochangewithoutnotice. Averageprice=Ameasureoftheweightedaveragepricepaidforthesecuritiescalculatedbytakingthepricesanddividing by thenumberofsecuritiesanddoesnotincludecash. Averagepriceshouldnotbeconfusedwithnetassetvalue. AverageDuration=Durationisusedasariskmeasure.Itmeasuresthepricevolatilityofasecuritygivenachangeininterest ratemovements. g Life=Theaverage g numberofyears y thateachdollarofunpaid p principal p p dueonthemortgage g g remainsoutstanding. g Average g lifeiscomputed p astheweighted g average g timeto Average thereceiptofallfuturecashflows,usingastheweightsthedollaramountsoftheprincipalpaydowns. Source:DoubleLineCapitalLP
64
CoreFixedIncomeFundPortfolioComposition
BankLoans 3.98% HY Corporate 0.16% IGCorporate 15.91% CLO CMBS 2.50% 7.06% Cash C h 2.99% Govt 17.85%
EM 14.38%
PortfoliocompositionasofMay31,2013.Subjecttochangewithoutnotice. BankLoans=Adebtfinancingobligationissuedbyabankorsimilarfinancialinstitutiontoacompany. CommercialMortgageBackedSecurities(CMBS)=CommercialMortgageBackedSecurities. Securities Securitizedloansmadeoncommercialratherthanresidentialproperty. property CollateralizedLoanObligations(CLOs)=Aformofsecurization wherepaymentsfrommultiplemiddlesizedandlargebusinessloansarepooledtogetherandpassedontodifferentclassed ofownersinvarioustranches Cash =Cashholdingincludethevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cash equivalentsonbalancesheetsthatmayincludesecuritiesthatmaturewithin90days. Government=Governmentdebt(alsoknownaspublicdebtornationaldebt)ismoney(orcredit)owedbyanylevelofgovernment;eithercentralgovernment,federalgovernment, municipalgovernmentorlocalgovernment. MortgageBackedSecurities=Amortgagebackedsecurity(MBS)isanassetbackedsecurityordebtobligationthatrepresentsaclaimonthecashflowsfrom mortgageloans,most commonlyonresidentialproperty EmergingMarketsFixedIncome=Emergingmarketdebt(EMD)isatermusedtoencompassbondsissuedbylessdevelopedcountries. InvestmentGradeandHighYieldCorporates (IG)=Investmentgradeandnoninvestmentgradecorporatecredit.Bondsissuedbycorporationstoraisemoneyinordertoexpandits business.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch).Abondrated BBBorhigherwouldbeconsideredInvestmentGrade.AnybondratedBBBorbelowwouldbeHighYield. 65 Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.
CoreFixedIncomeFund PortfolioCreditQualityBreakdown
NotRated 5.53% BelowIG 16.92% Cash 2.99% Govt 17 85% 17.85%
June4,2013
IndexDescriptions
BarclaysCapitalUSAggregateIndex TheBarclaysCapitalUSAggregateIndexrepresentssecuritiesthatareSECregistered, taxable,anddollardenominated.The indexcoverstheUSinvestmentgradefixedratebondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities, and dasset tbacked b k dsecurities. iti Th Thesemajor j sectors t aresubdivided bdi id di into t morespecific ifi i indices di th that tarecalculated l l t dand dreported t dona regular l b basis. i BarclaysCapitalUSTreasuryIndex ThisindexistheUSTreasurycomponentoftheUSGovernmentindex.PublicobligationsoftheUSTreasurywitharemaining maturityofoneyearormore. BarclaysCapitalUSTreasury10YearIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex. BarclaysCapitalCapitalUSTreasury30YearIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSHighYieldIndex TheBarclaysCapitalUSHighYieldIndexcoverstheuniverseoffixedrate,noninvestmentgradedebt.Eurobondsanddebt issuerfromcountriesdesignated g asemerging g gmarkets(e.g. ( g Argentina, g ,Brazil, ,Venezuela, ,etc.) )areexcluded, ,butCanadianand g globalbonds( (SECregistered) g )of issuersinnonEMGcountriesareincluded.Originalissuezereos,stepupcouponstructures,144Asandpayinkind(PIK,asofOctober1,2009)arealsoincluded. BofAMerrillLynchUSGovernmentIndex(GOAO) TheMerrillLynchUSGovernmentIndextrackstheperformanceofUSgovernment(i.e.securitiesinthe TreasuryandAgencyindices.) BofAMerrillLynchUS15+YearTreasuryIndexLongTreasuries(G802) ThisindexisasubsetoftheBofAMerrillLynchUSTreasuryIndexincludingallsecurities witharemainingtermoffinalmaturitygreaterthan15years.. BofAMerrillLynchUSCorporateIndex(COAO)InvestmentGrade TheMerrillLynchCorporateIndextrackstheperformanceofUSdollardenominated investmentgrade d corporatedebt d b publicly bl l issued dinthe h USdomestic d market. k Qualifying lf securitiesmusthave h aninvestmentgrade d rating(based (b donanaverageof f Moodys,S&PandFitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebt ratings).Securitiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$250MM. BofAMerrillLynchUSAllConvertiblesIndex(VOSO) TheMerrillLynchAllConvertibleIndexisaruledrivenindex.whichincludesallbondsandpreferredstocks ofU.S.registeredcompanies,whichhave$50millionormoreinaggregatemarketvalueandareconvertiblesinU.S.dollardenominatedcommonstocks,ADRsor cashequivalents.Pleasenoteaninvestorcannotinvestdirectlyinanindex. CRBCommodityIndex(CRY) Anunweightedgeometricaverageofsomeimportantcommodities. commodities Itaveragespricesacross17commoditiesandacrosstime. time The indextracksenergy,grains,industrials,livestock,preciousmetals,andagriculturals. S&P500(SPX) S&P500isafreefloatcapitalizationweightedindexpublishedsince1957ofthepricesof500largecapcommonstocksactively tradedinthe UnitedStates. StandardDeviation Sigma=standarddeviation.Itshowshowmuchvariationthereisfromtheaverage(mean,orexpected/budgetedvalue).Alow standard deviationindicatedthatthedatapointtendtobeveryclosetothemean,whereashighstandarddeviationindicatedthatthe dateisspreadoutoveralargerange ofvalues. DowJones UBSDJCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU.S.exchanges,withtheexceptionof aluminum,nickelandzinc,whichtradeontheLondonMetalExchange(LME). Copper=CopperSpotPrice(HGI)Copperistheworldsthirdmostusedmetalbehindironandaluminumprimarilyusedinhighlycyclicalindustriesincluding constructionandindustrialmachinerymanufacturing.SpotpricequotedinUSD/lb. Gold=GoldSpotPrice(Golds)TheGoldSpotpriceisquotedasUSDollarperTroyOunce. CrudeOil=Crudeoilvariesgreatlyinappearancedependingonitscomposition.WestTexasintermediate(WTI)=Texaslightsweetcrudeisusedasabenchmarkin oilpricing pricing.It Its slight light becauseofthelowdensityandsweetbecauseoflowsulfur sulfur.Brentcrude=Isamajortradingclassificationofsweetlightcrude crude.Brentistheoil makeralsoknownasBrentBlend. VolatilityIndex(VIX)TheVIXshowsthemarket'sexpectationof30dayvolatility.Itisconstructedusingtheimpliedvolatilitiesofawiderangeof S&P500index options. Thisvolatilityismeanttobeforwardlookingandiscalculatedfrombothcallsandputs. TheVIXisawidelyusedmeasureofmarketriskandisoften 68 referredtoas the"investorfeargauge".
IndexDescriptions
BofAMerrillLynchUSDollarEmergingMarketsSovereignPlusIndex(IGOV) ThisindextrackstheperformanceofUSdollardenominatedemergingmarketandcrossoversovereigndebtpubliclyissuedintheeurobondorUSdomesticmarket. QualifyingcountriesmusthaveaBB1orlowerforeigncurrencylongtermsovereigndebtrating(basedonanaverageofMoodys,S&P,andFitch). BofAMerrillLynchU.S.HighYieldCashPayIndex(J0A0)BelowInvestmentGrade TheMerrillLynchHighYieldIndextrackstheperformanceofUSdollardenominatedbelowinvestmentgradecorporatedebt,currentlyinacouponpayingperiod, thatispubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveabelowinvestmentgraderating(basedonanaverageofMoodys,S&PandFirth foreigncurrencylongtermsovereigndebtratings).Musthaveoneyearremainingtofinalmaturityandaminimumoutstandingamountof$100MM. BofAMerrillLynchInternationalGovernmentIndex(NOGO) TheMerrillLynchInternationalIndextrackstheperformanceofAustralia,Canadian,French,German,Japan,Dutch,SwissandUKinvestmentgradesovereigndebt publiclyissuedanddenominatedintheissuersowndomesticmarketandcurrency.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity, afixedcouponscheduleandaminimumamountoutstanding. BofAMerrillLynchMortgageBackedSecuritiesIndex(MOA0) ThisindextrackstheperformanceofUSdollardenominatedfixedrateandhybridresidentialmortgagepassthroughsecuritiespubliclyissuedbyUSagenciesinthe USdomesticmarket.30year,20year,15yearandinterestonlyfixedratemortgagepoolsareincludedintheIndexprovidedtheyhaveatleastoneyearremaining termtofinalmaturityandaminimumamountoutstandingofatleast$5billionpergenericcouponand$250MMperproductionyear withineachgenericcoupon. BofAMerrillLynchU.S.MunicipalSecuritiesIndex(UOA0) ThisindextrackstheperformanceofUSdollardenominatedinvestmentgradetaxexemptdebtpubliclyissuedbyUSstatesandterritories,andtheirpolitical subdivisions,intheUSdomesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandan investmentgraderating(basedonMoodys,S&PandFitch).Minimumsizevarybasedontheinitialtermtofinalmaturityattime ofissuance. BarclaysCapitalGlobalEmergingMarketsIndex TheBarclaysCapitalGlobalEmergingMarketsIndexrepresentstheunionoftheUSDdenominatedUSEmerging MarketsindexandthepredominatelyEURdenominatedPanEuroEmergingMarketsIndex, Index coveringemergingmarketsinthefollowingregions:Americas, Americas Europe, Europe MiddleEast,Africa,andAsia.AswithotherfixedincomebenchmarksprovidedbyBarclaysCapital,theindexisrulesbased,whichallowsforanunbiasedviewofthe marketplaceandeasyreplicability. JPMorganInvestmentGradeCorporateIndex JPMorganInvestmentGradeCorporateIndexincludesperformanceofUSdollardenominatedinvestmentgrade corporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&Pand Fitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securities musthaveatleastoney yearremaining gtermtofinalmaturity, y afixedcoupon p scheduleandaminimumamountoutstanding gof$250MM. DrawDown Thepeaktotroughdeclineduringaspecificrecordperiodofaninvestment,fundorcommodity.Adrawdownisusuallyquotedasthepercentage betweenthepeakandthetrough. NAV Amutualfund'spricepershareorexchangetradedfund's(ETF)persharevalue.Inbothcases,thepersharedollaramountof thefundiscalculatedbydividing thetotalvalueofallthesecuritiesinitsportfolio,lessanyliabilities,bythenumberoffundsharesoutstanding. CMO Atypeofmortgagebackedsecuritythatcreatesseparatepoolsofpassthroughratesfordifferentclassesofbondholderswith varyingmaturities,called tranches.Therepaymentsfromthepoolofpassthroughsecuritiesareusedtoretirethebondsintheorderspecifiedbythebonds'prospectus TIPS Treasury T I Inflation fl ti P Protection. t ti At treasurysecurity it th that ti isi indexed d dt toi inflation fl ti i inorder d t toprotect t ti investors t f fromth thenegative ti effects ff t of finflation. i fl ti TIPSare consideredanextremelylowriskinvestmentsincetheyarebackedbytheU.S.governmentandsincetheirparvalueriseswithinflation,asmeasuredbythe ConsumerPriceIndex,whiletheirinterestrateremainsfixed. CPI ConsumerPriceIndex.Ameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices,such astransportation,foodand 69 medicalcare. CashFlow Cashflowmeasuresthecashgeneratingcapabilityofacompanybyaddingnoncashcharges(e.g.depreciation)andinterestexpensetopretaxincome.
IndexDescriptions
IndexDescriptions
BofA/MerrillLynchInflationLinkedIndex(G0Q1) TheBofA MerrillLynchUSInflationLinkedTreasuryIndextrackstheperformanceofUSdollardenominated inflationlinkedsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket. CitigroupTIPS(SBUSILSI) . Itmeasuresthereturnsoftheinflationlinkedbondswithfixedratecouponpaymentsthatarelinkedtoaninflationindex.The priceof eachissueintheUSLSIisadjustedbyusinganindexratio.Theindexratioisdeterminedbydividingthecurrentinflationindexlevelbytheinflationindexlevelat thetimeofissueofthesecurity.Theinflationindexispublishedonamonthlybasis,andtheintramonthindexratioiscalculatedusinglinear interpolation. p BarclaysCapitalCMBSIndex trackstheperformanceofUSdollardenominatedsecuritizedcommercialmortgagebackedsecurities. Russell2000 measurestheperformanceofthesmallcapsegmentoftheUSequityuniverse.Russell2000isasubsetoftheRussell3000indexrepresenting approximately10%ofthetotalmarketcapitalizationofthatindex. S&PGSCI isacompositeindexofcommoditysectorreturnrepresentinganunleveraged,longonlyinvestmentincommodityfuturesthatisbroadlydiversified acrossthespectrumofcommodities. S&PGSCIAgriculture isacompositeindexofagriculturecommodityfuturesunleveraged,longonlyinvestment. BarclaysCapitalUS30YearTIPSIndex . BarclaysCapital30yearTIPSontherunindexquotedinUSDollarstradedintraday CitigroupEconomicSurpriseIndex . TheCitigroupEconomicSurpriseIndicesareobjectiveandquantitativemeasuresofeconomicnews.Theyaredefinedas weightedhistoricalstandarddeviationsofdatasurprises(actualreleasesvsBloombergsurveymedian).Apositivereadingof theEconomicSurpriseIndexsuggests thateconomicreleaseshaveonbalancebeatingconsensus.Theindicesarecalculateddailyinarollingthreemonthwindow.Theweightsofeconomicindicators arederivedfromrelativehighfrequencyspotFXimpactsof1standarddeviationdatasurprises.Theindicesalsoemployatimedecayfunctiontoreplicatethe limitedmemoryofmarkets. DAX ThisindexistheGermanStockIndexisatotalreturnindexof30selectedGermanbluechipstockstradedontheFrankfurtStockExchange. CAC40 ThisindexthemostwidelyusedindicatoroftheParismarket,reflectstheperformanceofthe40largestequitieslistedinFrance,measuredbyfreefloat marketcapitalizationandliquidity. FTSE100 Isacapitalizationweightedindexofthe100mosthighlycapitalizedcompaniestradedontheLondonStockExchange. MexicoIPC TheMexicanIPCindexisacapitalizationweightedindexoftheleadingstockstradedontheMexicanStockExchange. HangSeng TheHangSeng ChinaEnterprisesIndexisafreefloat capitalizationweightedindexcomprisedofHshareslistedontheHongKongStockExchangeand includedintheHangSeng MainlandCompositeIndex. KOSPI ThisindexisacapitalizedweightedindexofallcommonsharesontheKoreanStockExchanges. Nikkei225 TheNikkei225Stockaverageisapriceweightedaverageof225topratedJapanesecompanieslistedintheFirstSectionoftheTokyoStockExchange. AustraliaAORD S&P/ASXAllOrdinariesrepresents500largestcompaniesintheAustralianequitiesmarket.Indexconstitutesaredrawnfromeligiblecompanies listedontheAustralianStockExchange. BrazilBovespa Index(IBOV)TheBovespa Idnex isagrossreturnindexweightedbytradedvolumeandiscomprisedofthemostliquidstockstradedontheSao PauloStockExchange.TheBovespa Indexhasbeendivided10timesbyafactorof10sinceJanuary1,1985. ShanghaiIndex(SHCOMP) TheShanghaiStockExchangeCompositeIndexisacapitalizationweightedindex index.TheindextracksthedailyperformanceofallAshares andBshareslistedontheShanghaiStockExchange.TheindexwasdevelopedonDecember19,1990withabasevalueof100. BSEIndiaSensitiveIndex(Sensex)TheSensex isacapweightedindex.Theselectionoftheindexmembershasbeenmadeonthebasisofliquidity,depthand floatingstockadjustmentdepthandindustryrepresentation. 71
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ImportantInformationRegardingThisReport
Issueselection l i processesand dtools l ill illustrated dthroughout h h this hi presentation i aresamples l and dmayb bemodified difi dperiodically. i di ll Such hcharts h arenotthe h only l tools l used d bytheinvestmentteams,areextremelysophisticated,maynotalwaysproducetheintendedresultsandarenotintendedforusebynonprofessionals. DoubleLinehasnoobligationtoproviderevisedassessmentsintheeventofchangedcircumstances.Whilewehavegatheredthisinformationfromsources believedtobereliable,DoubleLinecannotguaranteetheaccuracyoftheinformationprovided.Securitiesdiscussedarenotrecommendationsandarepresented asexamplesofissueselectionorportfoliomanagementprocesses.Theyhavebeenpickedforcomparisonorillustrationpurposesonly.Nosecuritypresented withiniseitherofferedforsaleorpurchase.DoubleLinereservestherighttochangeitsinvestmentperspectiveandoutlook withoutnoticeasmarketconditions dictateorasadditionalinformationbecomesavailable available.
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Investmentstrategiesmaynotachievethedesiredresultsduetoimplementationlag,othertimingfactors,portfoliomanagementdecisionmaking,economicor marketconditionsorotherunanticipatedfactors.Theviewsandforecastsexpressedinthismaterialareasofthedateindicated,aresubjecttochangewithout notice,maynotcometopassanddonotrepresentarecommendationorofferofanyparticularsecurity,strategy,orinvestment. Pastperformanceisno guaranteeoffutureresults.
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DoubleLineseekstomaximizeinvestmentresultsconsistentwithourinterpretation p ofclientguidelines g andinvestmentmandate.WhileDoubleLineseeksto maximizereturnsforourclientsconsistentwithguidelines,DoubleLinecannotguaranteethatDoubleLinewilloutperformaclient'sspecifiedbenchmark. Additionally,thenatureofportfoliodiversificationimpliesthatcertainholdingsandsectorsinaclient'sportfoliomayberisinginpricewhileothersarefalling;or, thatsomeissuesandsectorsareoutperformingwhileothersareunderperforming.Suchoutorunderperformancecanbetheresultofmanyfactors,suchasbut notlimitedtoduration/interestrateexposure,yieldcurveexposure,bondsectorexposure,ornewsorrumorsspecifictoasinglename. DoubleLineisanactivemanagerandwilladjustthecompositionofclientsportfoliosconsistentwithourinvestmentteamsjudgmentconcerningmarket conditionsandanyparticularsecurity.TheconstructionofDoubleLineportfoliosmaydiffersubstantiallyfromtheconstruction ofanyofavarietyofbondmarket i di indices. A Assuch, h aD DoubleLine bl Li portfolio tf li h hasth thepotential t ti lt tounderperform d f oroutperform t f ab bond dmarket k ti index. d Si Sincemarkets k t canremain i inefficiently i ffi i tl priced i dfor f longperiods,DoubleLinesperformanceisproperlyassessedoverafullmultiyearmarketcycle. AsofMarch31,2013 theTotalReturnBondFundheld0.00%BankofCyprus,30.14%inFannieMae(FNMA), 14.59%inFreddieMac(FHLMC)and1.12%inGinnie Mae(GNMA).AsofMarch31,2013heCoreFixedIncomeFundheld0.00%BankofCyprus,11.57%inFannieMae(FNMA), 10.43%inFreddieMac(FHLMC)and 1.81%inGinnie Mae(GNMA).Fundholdingsandsectorallocationsaresubjecttochangeandarenotrecommendationstobuyorsellanysecurity. ReferencestootherFundsshouldnotbeinterpretedasanofferofthosesecurities. Diversification doesnotassureaprofitorprotectagainstalossinadecliningmarket. Opinionsexpressedaresubjecttochangeatanytime,arenotaguaranteeandshouldnotbeconsideredinvestmentadvice. 72 2013DoubleLineCapitalLP
LuzPadilla July23,2013
EmergingMarketsFixedIncome 1:15pmPDT/4:15pmEDT
JeffreyGundlach September10,2013
TotalReturn&CoreFixedIncome 1:15pmPDT/4:15pmEDT
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