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Is DLTNX a Strong Bond Fund Right Now?

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If you've been stuck searching for Government Mortgage - Intermediate funds, you might want to consider passing on by DoubleLine Total Return Bond N (DLTNX - Free Report) as a possibility. DLTNX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.


We classify DLTNX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS'that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.

History of Fund/Manager

Double Line is based in Los Angeles, CA, and is the manager of DLTNX. DoubleLine Total Return Bond N made its debut in April of 2010, and since then, DLTNX has accumulated about $7.35 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.


Obviously, what investors are looking for in these funds is strong performance relative to their peers. DLTNX has a 5-year annualized total return of 3.34% and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 4.35%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of DLTNX over the past three years is 2.31% compared to the category average of 6.4%. Looking at the past 5 years, the fund's standard deviation is 2.18% compared to the category average of 6.33%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.68, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, DLTNX has a positive alpha of 0.52, which measures performance on a risk-adjusted basis.


Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, DLTNX has 67.73% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AA, and focuses on high quality securities.


Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, DLTNX is a no load fund. It has an expense ratio of 0.74% compared to the category average of 0.79%. From a cost perspective, DLTNX is actually cheaper than its peers.

While the minimum initial investment for the product is $2,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, DoubleLine Total Return Bond N ( DLTNX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, DoubleLine Total Return Bond N ( DLTNX ) looks like a somewhat weak choice for investors right now.

This could just be the start of your research on DLTNXin the Government Mortgage - Intermediate category. Consider going to for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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