Jeff Gundlach's appearance before 1,300 Morningstar Conference attendees was not his only move yesterday; DoubleLine Capital, his Los Angeles-based mutual fund firm, also took the wraps off a partnership with Grail Advisors. The two firms are planning a fixed income ETF, reports Dow Jones newswire. Oh yes, the new ETF will be actively managed by Gundlach's team at DoubleLine (though not Gundlach himself -- it will be managed by a team headed by Luz Pudilla).

DoubleLine will be the advisor to the Grail DoubleLine Emerging Markets Fixed Income ETF. The ETF is the first for DoubleLine, though Grail is an old-hand with the products. What Grail has lacked so far is effective distribution for its existing products as the relative newcomer battles heavyweights such as iShares, SSgA, Vanguard and others. Meanwhile, DoubleLine has been the fastest growing fund firm in recent memory, going from zero to more than one billion in its flagship mutual fund (DoubleLine Total Return) in less than a year, Gundfest told Morningstar Conference attendees yesterday.

Grail CEO William Thomas certainly sees the benefits of pairing with DoubleLine. Indeed, he expects the new ETF to be just the first step in what he describes as a "long-standing relationship we are looking to develop." As he told Dow Jones reporter Daisy Maxey:

"You're seeing significant flows going into emerging-markets fixed-income strategies, and DoubleLine, from our research, was just a wonderful partner with a great track record and a seasoned, professional management team."

The deal follows an earlier partnership between Grail and Western Asset Management. Partnering with "bigger brands" turns out to be Thomas' strategy for building Grail in this highly competitive space.

"What we're seeing is that the bigger brands continue to want to get into this ETF space, [which is] certainly validated by Western Asset Management making the move," he told Maxey. 

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