- With the latest shareholder report out, we take a look at DSL - an EM debt overweight fund from DoubleLine.
- The fund has recently made a big distribution cut. However, we find that its current coverage is very strong, assuming it hasn't made big changes in its portfolio.
- The fund's discount has also widened moderately since the cut, which has further sweetened its already high investment income yield.
- A concern we have with the fund is its relatively cavalier treatment of drawdowns and investor capital where it deleverages sharply and releverages only slowly.
- Repeated bouts of deleveraging mean the fund hasn't kept up with its more conservative counterpart DBL and is a concern for investors worried about a double dip in the market.
For further details see:
DSL: A Serial Deleverage Machine With Strong Coverage