So, there I was, sipping lukewarm coffee at 3 a.m., wondering why anyone would sell a chunk of a fund that pays 11.7% yield. Turns out, it’s the same reason people break up with partners who still pay the bills: sometimes you just need to reassess. McGowan Group Asset Management, a Dallas-based entity with the emotional intelligence of a spreadsheet, offloaded 319,882 shares of DoubleLine Income Solutions Fund (DSL) for $3.9 million. Not a big deal, right? Unless you’re the kind of person who thinks a 10% drop in share price over a year is a “slight dip” in a 17% rally. Which, obviously, is everyone.
What Happened
On November 13, McGowan Group did the financial equivalent of tidying your closet and accidentally throwing out your favorite sweater. They sold 319,882 shares of DSL, reducing their stake to 2.91 million. The fund’s market value now sits at $35.69 million. It’s like watching someone lose a bet they didn’t even know they were making.
What Else to Know
DSL now accounts for 4.42% of McGowan’s assets under management. Previously, it was 4.97%. A subtle shift, but enough to make a portfolio manager’s coffee go cold. Their top holdings? JGH, AWF, HYT, UTF-closed-end funds that sound like they belong in a sci-fi movie. And let’s not forget DSL itself, which is now 5.13% of AUM. A bit like a party guest who keeps showing up, even though no one invited them.
Shares of DSL are trading at $11.27, down 10% year-over-year. While the S&P 500 is doing the cha-cha, DSL is stuck in a slow jam. But hey, at least it’s paying 11.7% yield. That’s like getting a free espresso with your sad latte.
Fund Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $110.73 million |
| Net Income (TTM) | $108.96 million |
| Dividend Yield | 11.7% |
| Price (as of Tuesday) | $11.27 |
Fund Snapshot
- DSL is a closed-end fund with a portfolio that’s equal parts “I’m a sophisticated investor” and “I’m just here for the money.”
- It’s managed by Jeffrey Gundlach, a billionaire who probably has a pet named “Risk.”
- The fund’s strategy? Take on debt, gamble on emerging markets, and hope the interest payments are enough to keep the lights on.
It’s the financial equivalent of a high-stakes poker game where the dealer is also your ex.
Foolish Take
Here’s the thing: high yields are like high heels. They look good, but they’ll leave you sore. DSL’s 11.7% yield is a red flag waving in a hurricane. The fund’s 23% leverage and heavy exposure to junk bonds and emerging markets mean it’s a ticking time bomb. When volatility hits, it’s not just the returns that’ll drop-it’s your entire worldview.
But here’s the twist: McGowan didn’t sell everything. They just trimmed. Like a person who says, “I’m not breaking up, I’m just taking a break,” while already drafting a breakup text. It’s strategic, not panic-driven. Or maybe it’s just another day in the life of someone who thinks “diversification” means buying more of the same thing.
Glossary
Assets Under Management (AUM): The total value of investments a fund manages. Think of it as the financial version of a hoarder’s basement.
Closed-end fund: A fund that trades like a stock but acts like a mystery box. You never know what’s inside.
Diversified portfolio: Spreading your bets so thinly, you’re basically a professional gambler.
Fixed income securities: Investments that pay regular interest. Like a boyfriend who never stops texting.
Corporate debt: A company’s loan. Usually, it’s a bad idea to lend money to someone who can’t pay their rent.
Sovereign debt: A country’s debt. Because nothing says “I trust you” like asking a nation to pay you back.
Mortgage-backed securities: Investments tied to home loans. Like betting on a house that’s already on fire.
Hybrid REITs: Real estate investments that are 50% property, 50% mortgage. Because why choose?
Bank loans: Loans from banks. Usually, they come with more conditions than a prenuptial agreement.
Municipal bonds: Bonds issued by cities. Because nothing says “I believe in you” like funding a public pool.
Dividend yield: How much a company pays in dividends. Like a paycheck you didn’t ask for.
TTM: Trailing twelve months. A fancy way of saying “I’m not sure, but I’ll pretend I am.”
So, what’s the takeaway? DSL is a fund that’s both a goldmine and a landmine. And if you’re thinking of investing, remember: the only thing more dangerous than a 11.7% yield is a fund that’s smart enough to know it.
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2025-12-31 01:42