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SPDR® DoubleLine® Total Return Tactical ETF (TOTL) – Q4 2022 Commentary

For the fourth quarter of 2022, the DoubleLine Total Return Tactical ETF (TOTL) returned 1.21% on a NAV basis.


For the quarter ended December 31, 2022, TOTL returned 1.21%, underperforming the Bloomberg US Aggregate Bond Index return of 1.87%, primarily due to its underweight allocation to corporate credit. While annualized levels of inflation remain far above historical averages, the Consumer Price Index continued to drift lower throughout the quarter, ending the year at 6.5%. The retreat from its 9.1% peak in June gave investors confidence that the Federal Reserve’s restrictive monetary policy has helped temper inflation. The Federal Reserve raised its Federal Funds Effective policy rate by 75 basis points (bps) in November and 50 bps in December. The 2-year Treasury yield increased by 15 bps during the period while the 10-year Treasury yield increased by 5 bps.1

Emerging market debt was the top performing sector within the fund due to spread tightening and the US dollar weakening over the quarter. Corporate credit sectors, such as high yield, bank loans, and investment grade corporates also outperformed the benchmark driven by carry and spread tightening. Structured credit within the portfolio, such as non-agency residential mortgage-backed securities (RMBS), asset-backed securities (ABS), and non-agency commercial mortgage-backed securities (CMBS) underperformed the benchmark as a less sanguine outlook for the sectors resulted in lackluster investor demand heading into year end.

Standard Performance

Fourth Quarter Fund Positioning:

  • The duration of the fund increased by 0.61 years to finish the quarter at 5.95 years.

Asset Allocation

Security Type




Agency Mortgage-Backed Securities


Non-Agency Mortgage-Backed Securities


Commercial Mortgage-Backed Securities


Investment Grade Corporates


High Yield Corporates


Collateralized Loan Obligations


Emerging Markets


Asset Backed Securities


Bank Loans








Source: DoubleLine, State Street Global Advisors. Allocations are as of December 31, 2022. Asset allocation is a method of diversification that positions assets among major investment categories. Asset allocation may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss. Allocations are as of the date indicated, are subject to change, and should not be relied upon as current thereafter.

Fund Positioning and Outlook:

The swift rise in interest rates in 2022 created yield opportunities within fixed income not seen in the past decade. While this improved opportunity set must be weighed against a macroeconomic backdrop of slowing growth and more restrictive policy from global central banks, we believe that bonds look extremely attractive. With inflation figures in decline and US economic indicators showing more signs of deterioration, we have turned more constructive on duration, particularly at the long end of the US Treasury curve. We favor high quality assets in this environment and continue to use paydowns to systematically upgrade the quality of the portfolio’s credit holdings. While corporate defaults have remained below historical averages, downgrade activity has picked up in recent months and we see this trend continuing into 2023 with corporate earnings likely to be pressured by sticky wage inflation and softening economic conditions. We remain constructive on structured credit relative to corporate credit as it offers more attractive spread levels while also benefitting from structural protections such as credit enhancement.

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