The DoubleLine Shiller Enhanced CAPE Fund uses the long-term
stock valuation principles of Nobel Prize-winning Yale economics professor Robert
Shiller.
The mutual fund combines Shiller’s stock market
strategy with active fixed-income investment management by DoubleLine Capital
LP. The no-load, open-end fund is available in two share classes, institutional
(DSEEX) and N shares (DSENX).
The fund seeks to deliver a total return in excess
of the Shiller Barclays CAPE U.S. Sector TR USD Index. DoubleLine will seek to invest
100% of the fund’s net assets in debt instruments. Part of those holdings will
be pledged as collateral against derivatives, exposing the fund to the four
least-valued sectors in the U.S. stock market as measured by the Cyclically
Adjusted Price Earnings ratio (the CAPE Ratio). The fund seeks to have
simultaneous exposures both to the index and to debt securities, each in an
amount potentially up to the value of the fund’s net assets.
The Index and the CAPE Ratio incorporate Shiller’s
principles of long-term stock investing. To the extent the derivatives strategy
leaves enough of the fund’s assets available for other investment, DoubleLine
will seek to manage the unreserved debt instruments to generate a supplemental
source of long-term return.
The fund’s holdings of debt instruments may
resemble those of the DoubleLine Core Fixed Income Fund, although the two
portfolios are likely to differ in several respects (such as the amount of cash
or short-term holdings). DoubleLine may determine to invest a portion of assets
directly in the DoubleLine Core Fixed Income Fund in lieu of investing directly
in a portfolio of debt instruments.
Shiller has conducted research on financial
markets, asset prices and macroeconomics. His work includes findings on the
relationship of stock price volatility to long-term returns. In 1981, Shiller
set the stage for the Cyclically Adjusted Price Earnings ratio (the CAPE Ratio)
in his paper, “Do Stock Prices Move Too Much to Be Justified by Subsequent
Movements in Dividends?”
Portfolio managers of the fund are Jeffrey
Gundlach, chief executive and chief investment officer of DoubleLine, and
Jeffrey Sherman, an asset-allocation specialist at DoubleLine.
According to Gundlach, the investment strategy is an
opportunity based on discipline and value. The fund gives investors access to
two complementary value-orientated approaches across both equity and
fixed-income markets, Shiller said in a release.
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Retirement Plan Deferral Limits Unchanged for 2014
The Internal Revenue Service (IRS) released the cost-of-living adjustments for 2014, which affect dollar limitations for pension plans and other retirement-related items.
The elective deferral (contribution) limit for employees who
participate in 401(k), 403(b), most 457 plans, and the federal government’s
Thrift Savings Plan remains unchanged at $17,500. The catch-up contribution
limit for employees ages 50 and over who participate in 401(k), 403(b), most
457 plans, and the federal government’s Thrift Savings Plan remains unchanged
at $5,500.
Section 415 of the Internal Revenue Code provides for dollar
limitations on benefits and contributions under qualified retirement plans. Section
415(d) requires that the Secretary of the Treasury annually adjust these limits
for cost of living increases. Other limitations applicable to deferred
compensation plans are also affected by these adjustments under Section 415.
Under Section 415(d), the adjustments are to be made pursuant to adjustment
procedures which are similar to those used to adjust benefit amounts under
Section 215(i)(2)(A) of the Social Security Act.
Effective January 1, 2014, the limitation on the annual
benefit under a defined benefit plan under Section 415(b)(1)(A) is increased
from $205,000 to $210,000. For a
participant who separated from service before January 1, 2014, the limitation
for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying
the participant’s compensation limitation, as adjusted through 2013, by 1.0155.
The limitation for defined contribution plans under Section
415(c)(1)(A) is increased in 2014 from $51,000 to $52,000.
The annual compensation limit under Sections 401(a)(17),
404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $255,000 to
$260,000.
The dollar limitation under Section
416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan
is increased from $165,000 to $170,000.
Other limitations released by the IRS include:
The deduction for taxpayers making contributions to a
traditional IRA is phased out for singles and heads of household who are
covered by a workplace retirement plan and have modified adjusted gross incomes
(AGI) between $60,000 and $70,000, up from $59,000 and $69,000 in 2013. For
married couples filing jointly, in which the spouse who makes the IRA
contribution is covered by a workplace retirement plan, the income phase-out
range is $96,000 to $116,000, up from $95,000 to $115,000. For an IRA
contributor who is not covered by a workplace retirement plan and is married to
someone who is covered, the deduction is phased out if the couple’s income is
between $181,000 and $191,000, up from $178,000 and $188,000. For a married
individual filing a separate return who is covered by a workplace retirement
plan, the phase-out range is not subject to an annual cost-of-living adjustment
and remains $0 to $10,000.
The AGI phase-out range for taxpayers making
contributions to a Roth IRA is $181,000 to $191,000 for married couples filing
jointly, up from $178,000 to $188,000 in 2013. For singles and heads of
household, the income phase-out range is $114,000 to $129,000, up from $112,000
to $127,000. For a married individual filing a separate return, the phase-out
range is not subject to an annual cost-of-living adjustment and remains $0 to
$10,000.
The AGI limit for the saver’s credit (also known as the
retirement savings contribution credit) for low- and moderate-income workers is
$60,000 for married couples filing jointly, up from $59,000 in 2013; $45,000
for heads of household, up from $44,250; and $30,000 for married individuals
filing separately and for singles, up from $29,500.
The dollar amount under Section 409(o)(1)(C)(ii) for
determining the maximum account balance in an employee stock ownership plan
subject to a five-year distribution period is increased from $1,035,000 to
$1,050,000, while the dollar amount used to determine the lengthening of the five-year
distribution period is increased from $205,000 to $210,000.
The limitation used in the definition of highly
compensated employee under Section 414(q)(1)(B) remains unchanged at $115,000.
The dollar limitation under Section
414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other
than a plan described in Section 401(k)(11) or Section 408(p) for individuals
aged 50 or over remains unchanged at $5,500. The dollar limitation under
Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer
plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50
or over remains unchanged at $2,500.
The annual compensation limitation under Section
401(a)(17) for eligible participants in certain governmental plans that, under
the plan as in effect on July 1, 1993, allowed cost of living adjustments to
the compensation limitation under the plan under Section 401(a)(17) to be taken
into account, is increased from $380,000 to $385,000.
The compensation amount under Section 408(k)(2)(C)
regarding simplified employee pensions (SEPs) remains unchanged at $550.
The limitation under Section 408(p)(2)(E) regarding
SIMPLE retirement accounts remains unchanged at $12,000.
The limitation on deferrals under Section 457(e)(15)
concerning deferred compensation plans of state and local governments and
tax-exempt organizations remains unchanged at $17,500.
The compensation amount under Section 1.61 21(f)(5)(i)
of the Income Tax Regulations concerning the definition of “control employee”
for fringe benefit valuation purposes is increased from $100,000 to $105,000. The
compensation amount under Section 1.61 21(f)(5)(iii) is increased from $205,000
to $210,000.
The dollar amount under Section 430(c)(7)(D)(i)(II)
used to determine excess employee compensation with respect to a
single-employer defined benefit pension plan for which the special election
under Section 430(c)(2)(D) has been made is increased from $1,066,000 to
$1,084,000.
For more information about 2014 plan limits, visit the IRS’ COLA Increases for
Dollar Limitations on Benefits and Contributions page.
A table of contribution and benefits limits is here.