LiveWebcasthostedby:
JeffreyGundlach
ChiefExecutiveOfficer
January14,2014
UpcomingWebcastAnnouncements
BrendtStallings&HusamNazer January21,2014 EquitiesWebcast SmallCap&EquitiesGrowth Gotowww.doublelinefunds.com,HomepageunderEvents 2014WebcastScheduletoregister 1:15pmPDT/4:15pmEDT JeffreySherman&SamGarza February11,2014 MultiAssetGrowthFundWebcast Gotowww.doublelinefunds.com,HomepageunderEvents 2014WebcastScheduletoregister 1:15pmPDT/4:15pmEDT PhilipBarach February25,2014 LowDurationWebcast Gotowww.doublelinefunds.com,HomepageunderEvents 2014WebcastScheduletoregister 1:15pmPDT/4:15pmEDT
2013PerformanceByAssetClass
40%
32.4%
30% CumulativeRe eturns Decembe er31,2012throughDecember31,2013
20%
10%
9.1%
6.0%
4.2% 0 3% 0.3%
0%
10%
5.0%
7.8%
20%
30%
40%
BofA/MerrillFixedIncomeIndexReturns
Grey=Year2013 Blue=YearToDate2014
Convertibles(VOSO) HighYield(JOAO) 5.79% InternationalEmerging(IGOV) Corporate(COAO) InternationalDeveloped(NOGO) Mortgages(MOAO) Government(G0A0) 1 40% 1.40% 3.21% 0.68% 1.46% 0.27% 1.03% 0.01% 0.42% 0.79% 26.60% 1.47% 0 67% 0.67% 7.38%
DataSource:BofA/MerrillLynchIndicesthroughyearendDecember31,2013andJanuary10,2014fortherespectiveyearsindicated. PleaseseetheAppendixforindexdefinitions.Aninvestmentcannotbemadedirectlyinanindex.
BofA/MerrillFixedIncomeIndexReturns
Grey=Y G Year2013 Blue=YearToDate2014
CCCRatedHighYield(JOA3) BBRatedHighYieldCredit(JOA1) BRatedHighYield(JOA2) BBBRatedCredit(COA4) ARatedCredit(COA3) 0.95% 1.82% 13.28% 0.91% 5.19% 0.62% 0.63% 1.04% 1.03% 1.32% 7.44%
AAARatedCredit(COA1) 4.27%
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 asofDecember31,2013andJanuary10,2014andfortheirrespectiveyearsindicated. PleaseseeappendixforIndexdefinitions Aninvestmentcannotbemadedirectlyinanindex.
USFixedIncomePerformanceBySector
December31,2012throughDecember31,2013
10%
0%
5%
10%
USFederalReserveRateHikeCycle
December6,2012throughJanuary6,2014
Source:Bloomberg,StateStreetGlobalMarkets
10YearUSTreasuryYields
January1,1790throughDecember18,2013
7
Source:GoldmanSachs,TopofMind,December18,2013.
US2Yearand5YearTreasuryIndex
January10,2013throughJanuary10,2014
Source:BloombergFinancialServices,DoubleLineCapitalLP Aninvestmentcannotbemadedirectlyinanindex.Pleaseseeappendixforindexdefinitions.
US2Yearand5YearTreasuryIndex
March31,1994throughJanuary10,2014
Source:BloombergFinancialServices,DoubleLineCapitalLP Aninvestmentcannotbemadedirectlyinanindex.Pleaseseeappendixforindexdefinitions
FederalReserveQEEffectsontheStockMarket
March18,2009throughJanuary6,2014
10
DOWIndexTrendEstimates
Source:http://financialvigilante.blogspot.com/2013/12/stockmarketin2014canruncontinue.html,December20,2013StockMarketin2014 CantheRunContinue?
DowIndex=DowJonesIndustrialAverageisapriceweightedaverageof30bluechipstocksthataregenerallytheleaderintheirindustry. Aninvestmentcannotbemadedirectlyinanindex.
11
MarginBorrowingCPIAdjusted
March31,1959throughNovember30,2013
12
CRBCommodityIndex
YearEnd2007throughJanuary13,2014
13
S&P500SectorBreakdownfor2013
EntireYear2013
14
S&P500TotalReturnMaximumDrawdownina CalendarYear(January1,1970throughDecember31,2013)
Intheprevious43years,only3haveexperiencedalowerpeaktotroughdrawdownthan 2013 0.00%
5.00% Maxim mumPeaktoTrough hDrawdowninCale endarYear 10.00% 15 00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%
15
16
17
GoldBrokeits200DayMovingAverageSlightlyEarlier
December31,2012throughDecember31,2013
18
S&P500Realized6Month(126days)StandardDeviation
January7,2009throughJanuary7,2014
19
20
CommoditiesBroketheRiskOn,RiskOff BehavioroftheUSEquityMarket
July1,2000throughJanuary10,2014
6MoCorrelation(S&P500,DJUBS)
0.80
0.60
0.40
0.20
0.00
0.20
0.40
21
1200.00
800 00 800.00
600.00
400.00
200 00 200.00
0.00
Source:BloombergFinancialServices,DoubleLineCapitalLP
22
USMutualFundFlows
January1,2011throughDecember31,2013
80
60
40
20
20
40
Source:InvestmentCompanyInstitute(ICI),DoubleLine Capital
23
USEquity&BondMutualFundFlowsByYear
January1,2007throughDecember31,2013
450,000
BondandEquityMutualFundFlowsReversedin2013
Equitymutualfunds Bondmutualfunds
350,000
Cumulativen netinflowsbyyear($millions)
250,000
50,000
50,000
150,000
250,000
350,000
2007
2008
2009
2010
2011
2012
2013
Source:InvestmentCompanyInstitute;CreditSuisse;Bloomberg;DoubleLine
24
60/40PortfolioRebalancingFor2014
Withequityprofitsin2013,manypensionplans,definedbenefitplans,etc.,willneedto rebalancetheirportfoliosintobondsin2014tomaintaina 60/40mixofbondstoequity.
25
USEconomicWinners&Losers
December31,2008throughDecember31,2013
Source:http://www.nytimes.com/2013/12/30/opinion/americain2013astoldincharts.html?pagewanted=all Aninvestmentcannotbemadeinanindexdirectly.
26
USJobGapSince2008
January1,2008throughProjectedYear2019
Source:http://www.nytimes.com/2013/12/30/opinion/americain2013astoldincharts.html?pagewanted=all
27
PublicOpinionPollsfor2014
Source:Zerohedge,http://www.zerohedge.com/news/20140105/whatuspopulationmostconcernedabout,1/5/2014
28
PublicOpinionPollsfor2014
December30,2013,http://www.gallup.com/poll/166658/smallbusinessowners mixedexpectations2014.aspx
29
PriceofGoldvs.FederalReserveBankTotalAssets
October22,2001throughJanuary10,2014
30
31
10YearUSTreasuryYield
YearEnd2007throughJanuary14,2014
Source:BloombergFinancialServices Aninvestmentcannotbemadeinanindexdirectly.Pleaseseetheappendixfordefinition.
32
InvestmentGradeIndexYields
YearEnd2007throughJanuary13,2014
33
RelativeGrowthofMerrillCorporateIndexto MerrillTreasuryIndex
1.40
1.30
1.20
1.10
1.00
0.90
Trend
0.80
2Sigmas RelativetoTrend
Corporate/Treasury
DataSource:MerrillLynch(C0A0;G0Q0);Monthlydatawithmostrecentobservationappended. Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions
34
HighYieldIndexYields
December1,2003throughDecember31,2013
25
20
15
10
Apr13
Aug08
Aug09
Aug10
Aug11
Aug12
Aug13
Apr08
Apr09
Apr10
Apr11
Apr12
Aug07
Aug06
Aug05
Aug04
Dec03
Dec04
Dec05
Dec06
Dec07
Dec08
Dec09
Dec10
Dec11
Dec12
Dec13
Apr04
Apr05
Apr06
Apr07
35
RelativeGrowthofMerrillHighYieldCashPayIndexto Merrill15+YearTreasuriesIndex
1.30 1.20
1.10
1 00 1.00
0.90
0.80
0.70
Trend
0.60
2Sigmas RelativetoTrend
HighYield/15+yr Treasury
0.50
DataSource:MerrillLynch(J0A0;G8O2);Monthlydatawithmostrecentobservationappended. Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions
36
1.10
1.05
1.00
0.95
Trend
0.90
2Sigmas RelativetoTrend
Mortgage/Treasury
DataSource:MerrillLynch(M0A0;G0Q0);Monthlydatawithmostrecentobservationappended. Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions
37
Trend
2Sigmas RelativetoTrend
Municipal/1015yr Treasury
1.00
0 95 0.95
0.90
0.85
0.80
0.75
0.70
DataSource:MerrillLynch(U0A0;G7O2);Monthlydatawithmostrecentobservationappended. Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions
38
MerrillInternationalFixedIncomeIndexReturns
Last12 MonthsEndingDecember31,2013(InlocalCurrency)
18.10% Japan(GOYO) Brazil(GDBR) Mexico(GDMX) Russia(GDRU) UnitedKingdon(GOLO) Germany(GODO) France(GOFO) 10.76% 8.03% 4.87% 4.25% 2.26% 0.51%
20.00%
10.00%
0.00%
39
2013GlobalEquityReturns
70% 60%
59.3%
50%
40%
30%
20%
10%
6.6% 0.9%
0%
0.0%
10%
3.9%
20%
15.5% 15 5%
Source:Bloomberg S Bl b Nikkei225(NKY)=Nikkei225stockaverageispriceweightedaverageof225topratedJapanesecompanieslistedontheTokyoexchange.NASDAQ=USbroadbasedcapitalizationweightedindexof stocks.Russell2000(RTY)=Indexcomprisedofthesmallest2000companiesintheRussell3000index.DAX=TheGermanStock Indexof30selectedGermanblueshipstockstradedontheFrankfurt exchange.CAC40=themostwidelyusedindicatorinParis,reflectstheperformanceofthe40largestequitieslistedinFrance.AustraliaAORD=capitalizedweightedindexofthelargest500 companieslistedinAustralia.FTSE100=capitalizedweighted100mosthighlycapitalizedstockstradedonLondonStockExchange.IndiaSENSEX=S&PBSESensex indexiscapweightedIndianStock Exchange.HangSeng =HongKongfree floatcapweightedstockexchange.KOSPI=Koreancapweightedstockexchange.MexicoIPC=CapweightedindexoftheleadingstocksontheMexican Exchange.BrazilBovespa =grosstotalreturnweightedstocksontheSaoPaulostockexchange. Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexforotherdefinitions
40
EuropehasSteppedOutofCrisisMode
December31,2009throughJanuary10,2014
16.0
10yearrates:peripheralspreadsvs.Germany(%)
14.0
Draghi's"whateverit takes"speech
12.0
10.0
EuroCrisis heightens
8.0
6.0
4.0
2.0
0.0
Italy
Spain
Ireland
Portugal
41
Equities:EuropeanEquityReturns
December31,2012throughDecember31,2013
EuropeanMSCIEquityUSDTotalReturnIndices
135
125
CumulativeReturn n
115
105
Spain
95
85
42
ClosingStockPrices&PriceLevelsintheUS&Germany
November30,2008throughNovember30,2013
43
GlobalRealRates(CPIminus10Year)
January12,2009throughJanuary10,2014
44
EmergingMarketsBondFundSharesOutstandingRose andFellWithQEInfinityHopes
January12,2009throughJanuary13,2014
45
S&P500vs.EmergingMarketsEquities
January10,2012throughJanuary13,2014
46
USD/EMFXand10yUSTYieldSince12/31/12
As so of1/10/14 / 0/
109
USD/EMFXPerformanceand10YUST
3.10
108 2.90
107
USD/EMFXIndex(Norma alized)
106
2.70
104 2.30 103 USD/EM / FX 2.10 102 10YUST 1.90 101 1.70
100
99
1.50
10YUSTYield
105
2.50
47
AsiaForeignExchangeChart
December31,2012throughNovember30,2013
48
EmergingMarketsRelativetoDevelopedWorld
LastFiveYears(11008to11014)
49
EmergingMarketsRelativetoDevelopedWorld
LastTenYears(11004to11014)
50
EmergingMarketsCurrencies
AsofDecember31,2013
RON=RomanianLeu spotprice.CNY=ChineseRenminbi spotprice.HUF=Hungarianforintspotprice.PLN=PolishZlotyspotprice.MXN=MexicanPesospotprice.KRW=SouthKorean WonSpot price.RUB=RussianRublespotprice.TWD=Taiwanesedollarspotprice.INR=IndianRupeespotprice.SGD=Singaporedollarspotprice.PEN=PeruvianNewSolspotprice.THB=ThaiBahtspot price.MYR=MalaysianRinggitspotprice.CLP=ChileanPesospotprice.CZK=CzechKorunaspotprice.COP=ColumbianPeso spotprice.BRL=BrazilianRealspotprice.PHP=Philippinepesospot price.TRY=TurkishLiraspotprice.IDR=IndonesianRupiahspotprice.ZAR=SouthAfricanRandspotprice.CEEMEA=CentralEasternEurope,MiddleEastandAfrica,EM=EmergingMarkets.Asia= AsiaandLatam =LatinAmerica.
51
ShanghaiIndex
December31,2009throughJanuary13,2014
52
U.S.DollarIndexSpot
YearEnd2007throughJanuary13,2014
53
30YearU.S.MortgageRates
December31,2007throughJanuary10,2014
5454
Lumbervs.HomebuildersIndex
January11,2010throughJanuary10,2014
55
HomeownershipRate
5656
MortgageRefinancingIndex
January17,2003throughJanuary3,2014
5757
ABXAAA071Index
December31,2009throughJanuary13,2014
58
NonAgencyResidentialMBS(RMBS)60++ DelinquencyRate
January31,2005throughNovember30,2013
60%
36.0%
40%
30%
20.5%
20%
9.6%
10%
0%
59
NonAgencyRMBSConditionalDefaultRate
January31,2005throughNovember30,2013
18% 16% 14% CDR Januar ry2005throughNo ovember2013 12% 10% 8% 6% Prime 4% 2% 0% AltA Subprime
6.2%
5.1% 2.5%
60
NonAgencyRMBSLossSeverity
January31,2005throughNovember30,2013
90%
Prime
80% 70% LossSeverity January2 2005throughNovember2013 60% 50% 40% 30% 20% 10% 0%
AltA Subprime
75.2%
57.4%
45.8%
RMBS=Residential R id i lMortgage M Backed B k dSecurities S ii SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREO status. PrimedefinedasFICO>725andLTV<75 AltAdefinedasFICO675725;orFICO>725andLTV>=75 SubprimedefinedasFICO<675 Source:LoanPerformance,Vichara,DoubleLineCapital
61
NonAgencyRMBSConditionalRepaymentRate
January31,2005throughJuly31,2013
45%
40%
35%
30%
25%
20%
15%
16.1% 9.2%
10%
5%
3.4%
0%
62
LiveWebcasthostedby:
JeffreyGundlach
ChiefExecutiveOfficer
January14,2014
UpcomingWebcastAnnouncements
BrendtStallings&HusamNazer January21,2014 EquitiesWebcast SmallCap&EquitiesGrowth Gotowww.doublelinefunds.com,HomepageunderEvents 2014WebcastScheduletoregister 1:15pmPDT/4:15pmEDT JeffreySherman&SamGarza February11,2014 MultiAssetGrowthFundWebcast Gotowww.doublelinefunds.com,HomepageunderEvents 2014WebcastScheduletoregister 1:15pmPDT/4:15pmEDT PhilipBarach February25,2014 LowDurationWebcast Gotowww.doublelinefunds.com,HomepageunderEvents 2014WebcastScheduletoregister 1:15pmPDT/4:15pmEDT
64
IndexDescriptions
BarclaysCapitalUSAggregateIndex TheBarclaysCapitalUSAggregateIndexrepresentssecuritiesthatareSECregistered, taxable,anddollardenominated.Theindex
coverstheUSinvestmentgradefixedratebondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbacked securities.Thesemajorsectorsaresubdividedintomorespecificindicesthatarecalculatedandreportedonaregularbasis.
BarclaysCapitalUSTreasuryIndex ThisindexistheUSTreasurycomponentoftheUSGovernmentindex.PublicobligationsoftheUSTreasurywitharemaining
maturityofoneyearormore.
BarclaysCapitalUSTreasury2YearIndex Thisindexisthe2yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSTreasury5YearIndex Thisindexisthe5yearcomponentoftheUSGovernmentindex. Barclays l Capital C i lUS STreasury7YearIndex d Thisindexisthe7yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSTreasury10YearIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex. BarclaysCapitalCapitalUSTreasury30YearIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSHighYieldIndex TheBarclaysCapitalUSHighYieldIndexcoverstheuniverseoffixedrate,noninvestmentgradedebt.Eurobondsanddebtissuer
fromcountriesdesignatedasemergingmarkets(e.g.Argentina,Brazil,Venezuela,etc.)areexcluded,butCanadianandglobal bonds(SECregistered)ofissuersinnonEMGcountries areincluded.Originalissuezereos,stepupcouponstructures,144Asandpayinkind(PIK,asofOctober1,2009)arealsoincluded.
BofAMerrillLynchUSGovernmentIndex(GOAO) TheMerrillLynchUSGovernmentIndextrackstheperformanceofUSgovernment(i.e.securitiesinthe
TreasuryandAgencyindices.)
BofAMerrillLynchUSCorporateIndex(COAO)InvestmentGrade TheMerrillLynchCorporateIndextrackstheperformanceofUSdollardenominated investmentgradecorporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&Pand Fitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleast oneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$250MM. BofAMerrillLynchUSAllConvertiblesIndex(VOSO) The Th M Merrill illLynch L hAllConvertible C tibl Index I d is i arule l driven d i index. i d which hi hincludes i l d all llbonds b d and dpreferred f dstocks t k ofU.S.registeredcompanies,whichhave$50millionormoreinaggregatemarketvalueandareconvertiblesinU.S.dollardenominatedcommonstocks,ADRsorcashequivalents. Pleasenoteaninvestorcannotinvestdirectlyinanindex. BofAMerrillLynchMunicipalMasterIndex(UOAO) TheMerrillLynchUSMunicipalSecuritiesIndextrackstheperformanceofUSdollardenominated
investmentgradetaxexemptdebtpublicallyissuedbyUSstatesandterritories,andtheirpoliticalsubdivisions,intheUSdomesticmarket.
CRBCommodityIndex Anunweightedgeometricaverageofsomeimportantcommodities.Itaveragespricesacross17commoditiesandacrosstime.The
indextracksenergy, energy grains, grains industrials, industrials livestock, livestock preciousmetals, metals andagriculturals. agriculturals S&P500 S&P500isafreefloatcapitalizationweightedindexpublishedsince1957ofthepricesof500largecapcommonstocksactively tradedintheUnited States. StandardDeviation Sigma=standarddeviation.Itshowshowmuchvariationthereisfromtheaverage(mean,orexpected/budgetedvalue).Alow standarddeviationindicatedthatthedatapointtendtobeveryclosetothemean,whereashighstandarddeviationindicated thatthedateisspreadoutovera largerangeofvalues. DowJones UBSDJCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU U.S. S exchanges exchanges,withthe exceptionofaluminum,nickelandzinc,whichtradeontheLondonMetalExchange(LME). BofA/MerrillLynchMexicanGovernmentIndex(GDMX) TheindextrackstheperformanceofUSDdenominatedsovereigndebtpubliclyissuedbytheMexican governmentintheMexicandomesticmarket.Fixedratesecuritieswithminimumoneyearmaturityremaining. 65 BofA/MerrillLynchUnitedKingdomGovernmentIndex(GOLO) TheindextrackstheperformanceofGBPdenominatedsovereigndebtpubliclyissuedbytheUK governmentinitsdomesticmarket.Fixedratesecuritieswithminimumoneyearmaturityremaining.
IndexDescriptions
BofAMerrillLynchUSDollarEmergingMarketsSovereignPlusIndex(IGOV)
ThisindextrackstheperformanceofUSdollardenominatedemergingmarketandcrossoversovereigndebtpubliclyissuedintheeurobondorUSdomesticmarket.Qualifying countriesmusthaveaBB1orlowerforeigncurrencylongtermsovereigndebtrating(basedonanaverageofMoodys,S&P,andFitch).
BofAMerrillLynchU.S.HighYieldCashPayIndex(J0A0)BelowInvestmentGrade
TheMerrillLynchHighYieldIndextrackstheperformanceofUSdollardenominatedbelowinvestmentgradecorporatedebt,currentlyinacouponpayingperiod,thatispubliclyissued intheUSdomesticmarket.Qualifyingsecuritiesmusthaveabelowinvestmentgraderating(basedonanaverageofMoodys,S&PandFirthforeigncurrencylongtermsovereigndebt ratings).Musthaveoneyearremainingtofinalmaturityandaminimumoutstandingamountof$100MM.
BofAMerrillLynchInternationalGovernmentIndex(NOGO)
TheMerrillLynchInternationalIndextrackstheperformanceofAustralia,Canadian,French,German,Japan,Dutch,SwissandUKinvestmentgradesovereigndebtpubliclyissuedand denominatedintheissuersowndomesticmarketandcurrency.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleanda minimumamountoutstanding.
BofAMerrillLynchMortgageBackedSecuritiesIndex(MOA0)
ThisindextrackstheperformanceofUSdollardenominatedfixedrateandhybridresidentialmortgagepassthroughsecuritiespubliclyissuedbyUSagenciesintheUSdomestic market.30year,20year,15yearandinterestonlyfixedratemortgagepoolsareincludedintheIndexprovidedtheyhaveatleastoneyearremainingtermtofinalmaturityanda minimumamountoutstandingofatleast$5billionpergenericcouponand$250MMperproductionyearwithineachgenericcoupon.
BofAMerrillLynchU.S.MunicipalSecuritiesIndex(UOA0)
ThisindextrackstheperformanceofUSdollardenominatedinvestmentgradetaxexemptdebtpubliclyissuedbyUSstatesandterritories,andtheirpoliticalsubdivisions,intheUS domesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleand aninvestmentgraderating(basedonMoodys,S&P andFitch).Minimumsizevarybasedontheinitialtermtofinalmaturityattimeofissuance.
B l Capital Barclays C it lGl Global b lEmerging E i Markets M k t I Index d TheBarclaysCapitalGlobalEmergingMarketsIndexrepresentstheunionoftheUSDdenominatedUSEmerging MarketsindexandthepredominatelyEURdenominatedPanEuroEmergingMarketsIndex,coveringemergingmarketsinthefollowingregions:Americas,Europe,MiddleEast,Africa, andAsia.AswithotherfixedincomebenchmarksprovidedbyBarclaysCapital,theindexisrulesbased,whichallowsforanunbiasedviewofthemarketplaceandeasyreplicability. JPMorganInvestmentGradeCorporateIndex JPMorganInvestmentGradeCorporateIndexincludesperformanceofUSdollardenominatedinvestmentgrade corporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch)andan investmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleastoneyear remaining gtermtofinalmaturity, y afixedcoupon p scheduleandaminimumamountoutstanding gof$250MM. CPI
ConsumerPriceIndex.Ameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices,such astransportation,foodandmedicalcare.
IndexDescriptions
BofAMerrillLynchUSTreasuryIndex(G0Q0)TheMerrillLynchUSTreasuryIndextrackstheperformanceofUSdollardenominatedsovereigndebtpublicly issuedbytheUSgovernmentinitsdomesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinal maturity,afixedcouponschedule andaminimumamountoutstandingof$1billion. BofAMerrillLynchUS1015YearTreasuryIndexLongTreasuryTheMerrillLynchUS1015TreasuryIndextrackstheperformanceofUSdollardenominated10 15yearsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.ItisasubsetoftheBofAMerrillLynchU.S.TreasuryIndex(GOQO). BofA/MerrillLynchHighYieldCashPayCCCratedIndex(JOA3) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonCCCrated g Yieldcreditonly. y High BofA/MerrillLynchHighYieldCashPayBBratedIndex(JOA1) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonBBrated HighYieldcreditonly. BofA/MerrillLynchHighYieldCashPayBratedIndex(JOA2) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonBratedHigh Yieldcreditonly. BofA/MerrillLynchCreditIndexBBBratedIndex(COA4) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthelowerratedBBB investmentgradecredits. BofA/MerrillLynchCreditIndexArated A ratedIndex(COA3) . AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingontheAratedinvestmentgrade credits. BofA/MerrillLynchCreditIndexAAAratedIndex(COA1) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthehighestratedAAA investmentgradecredits. DowJones UBSCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU.S.exchanges,withtheexceptionof aluminum,nickelandzinc,whichtradeontheLondonMetalExchange(LME). ShanghaiIndex TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedonthe ShanghaiStockExchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100. S&P/CaseShillerCompositeHomePriceIndex TheCaseShillerHomePriceIndices,onecomprisedofpricechangeswithinall20metropolitanmarkets,and anothercomprisedofpricechangeswithinthefollowingsubsetof10metropolitanmarkets:Boston,Chicago,Denver,LasVegas,LosAngeles,Miami,NewYork, SanDiego,SanFranciscoandWashingtonDC.Inadditiontothose10markets,the20HomePriceindexreflectspricechangesforAtlanta,Charlotte,Dallas,Detroit, Minneapolis,Phoenix,Portland,SeattleandTampa. DowJonesIndustrialAverage AlsoknownastheDOWisastockmarketindexthatincludes30largepublicallyownedcompaniesbasedintheU.S.havetraded duringastandardtradingsessioninthestockmarket. NASDAQ Acomputerizedsystemthatfacilitatestradingandprovidespricequotationsonmorethan5,000ofthemoreactivelytradedover thecounterstocks. Createdin1971,theNasdaqwastheworld'sfirstelectronicstockmarket. Transports TheIndustrialsSectorincludescompanieswhosebusinessesaredominatedbyoneofthefollowingactivities:Themanufactureand distributionof capitalgoods,includingaerospace&defense,construction,engineering&buildingproducts,electricalequipmentandindustrial machinery Utilities Apublicutilityisabusinessthatfurnishesaneverydaynecessitytothepublicatlarge.Publicutilitiesprovidewater,electricity,naturalgas,telephone service andotheressentials service, essentials.Utilitiesmaybepubliclyorprivatelyowned owned,butmostareoperatedasprivatebusinesses businesses. BasisPoint Abasispointisaunitthatisequalto1/100th of1%,andisusedtodenotethechangeinafinancialinstrument. REIT RealEstateTrust.Asecuritythatsellslikeastockonthemajorexchangesandinvestsinrealestatedirectly,eitherthrough propertiesormortgages Duration Durationisacommonlyusedmeasureofthepotentialvolatilityofthepriceofadebtsecurity,ortheaggregatemarketvalueofaportfolioofdebt 67 securities,priortomaturity.Securitieswithalongerdurationgenerallyhavemorevolatilepricesthansecuritiesofcomparablequalitywithashorterduration.
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ImportantInformationRegardingThisReport
Issueselectionprocessesandtoolsillustratedthroughoutthispresentationaresamplesandmaybemodifiedperiodically.Suchchartsarenottheonlytoolsused bytheinvestmentteams,areextremelysophisticated,maynotalwaysproducetheintendedresultsandarenotintendedforusebynonprofessionals. DoubleLinehasnoobligationtoproviderevisedassessmentsintheeventofchangedcircumstances.Whilewehavegatheredthisinformationfromsources believedtobereliable,DoubleLinecannotguaranteetheaccuracyoftheinformationprovided.Securitiesdiscussedarenotrecommendationsandarepresented asexamplesofissueselectionorportfoliomanagementprocesses.Theyhavebeenpickedforcomparisonorillustrationpurposesonly.Nosecuritypresented withiniseitherofferedforsaleorpurchase.DoubleLinereservestherighttochangeitsinvestmentperspectiveandoutlook withoutnoticeasmarketconditions dictateorasadditionalinformationbecomesavailable.
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Investmentstrategiesmaynotachievethedesiredresultsduetoimplementationlag,othertimingfactors,portfoliomanagementdecisionmaking,economicor marketconditionsorotherunanticipatedfactors.Theviewsandforecastsexpressedinthismaterialareasofthedateindicated,aresubjecttochangewithout notice may notice, ma notcometopassanddonotrepresentarecommendationorofferofany an particular partic larsecurity, sec rit strategy, strateg orinvestment. in estment Pastperformanceisno guaranteeoffutureresults.
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DoubleLineseekstomaximizeinvestmentresultsconsistentwithourinterpretationofclientguidelinesandinvestmentmandate.WhileDoubleLineseeksto maximizereturnsforourclientsconsistentwithguidelines,DoubleLinecannotguaranteethatDoubleLinewilloutperformaclient'sspecifiedbenchmark. Additionally,thenatureofportfoliodiversificationimpliesthatcertainholdingsandsectorsinaclient'sportfoliomayberisinginpricewhileothersarefalling;or, thatsomeissuesandsectorsareoutperformingwhileothersareunderperforming.Suchoutorunderperformancecanbetheresultofmanyfactors,suchasbut / rateexposure, p , y yieldcurveexposure, p ,bondsectorexposure, p ,ornewsorrumorsspecific p toasingle g name. notlimitedtoduration/interest DoubleLineisanactivemanagerandwilladjustthecompositionofclientsportfoliosconsistentwithourinvestmentteamsjudgmentconcerningmarket conditionsandanyparticularsecurity.TheconstructionofDoubleLineportfoliosmaydiffersubstantiallyfromtheconstruction ofanyofavarietyofbondmarket indices.Assuch,aDoubleLineportfoliohasthepotentialtounderperformoroutperformabondmarketindex.Sincemarketscanremaininefficientlypricedfor longperiods,DoubleLinesperformanceisproperlyassessedoverafullmultiyearmarketcycle. Diversification doesnotassureaprofitorprotectagainstalossinadecliningmarket. Opinions O i i expressed daresubject bj tochange h atanytime, i arenotaguaranteeand dshould h ldnotbe b considered id dinvestment i advice. d i 2014DoubleLineCapitalLP 68
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