Gundlach Presentation: Penny For Your Thoughts [SLIDES]

LiveWebcasthostedby:

JeffreyGundlach

ChiefExecutiveOfficer

June10,2014

PennyForYourThoughts

FundOfferings

RetailandInstitutionalClassNoLoadMutualFund

Retail Inst.Nshare Ishare

Ticker DLTNX DBLTXMinInvestment $2,000 $100,000MinIRAInvestment $500 $5,000GrossExpenseRatio 0.73% 0.48%

RetailandInstitutionalClassNoLoadMutualFund

Retail Inst.Nshare Ishare

Ticker DLFNX DBLFXMinInvestment $2,000 $100,000MinIRAInvestment $500 $5,000Gross ExpenseRatio 0.76% 0.51%

TotalReturnBondFund CoreFixedIncomeFund

TheFundsinvestmentobjectives,risks,chargesandexpensesmustbeconsideredcarefullybeforeinvesting.Thestatutoryprospectusandsummaryprospectus(ifavailable)containsthisandotherimportantinformationabouttheFunds,anditmaybeobtainedbycalling1(877)3546311/1(877)DLINE11,orvisitingwww.doublelinefunds.com.Readitcarefullybeforeinvesting.Investmentsindebtsecuritiestypicallydecreaseinvaluewheninterestratesrise.Thisriskisusuallygreaterforlongertermdebtsecurities.Investmentsinlowerratedandnonratedsecuritiespresentagreaterriskoflosstoprincipalandinterestthanhigherratedsecurities.InvestmentsinAssetBackedandMortgageBackedSecuritiesincludeadditionalrisksthatinvestorsshouldbeawareofsuchascreditrisk,prepaymentrisk,possibleilliquidityanddefault,aswellasincreasedsusceptibilitytoadverseeconomicdevelopments.TheFundsmayusecertaintypesofinvestmentderivatives.Derivativesinvolverisksdifferentfrom,andincertaincases,greaterthantheriskspresentedbymoretraditionalinvestments.Derivativesmayinvolvecertaincostsandrisksuchasliquidity,interestrate,market,credit,managementandthe riskthatapositioncouldnotbeclosedwhenmostadvantageous.Investinginderivativescouldlosemorethantheamountinvested.TheFundsmayalsoinvestinsecuritiesrelated torealestate,whichmaydeclineinvalueasaresultoffactorsaffectingtherealestateindustryTheCoreFixedIncomeFundinvestsinforeignsecuritieswhichinvolvegreatervolatilityandpolitical,economicandcurrencyrisksanddifferencesinaccountingmethods.Theserisksaregreaterforinvestmentsinemergingmarkets.TheTotalReturnBondFundintendstoinvestmorethan50%ofitsnetassetsinmortgagebackedsecuritiesofanymaturityortype.Opinionsexpressedaresubjecttochangeatanytime,arenotforecastsandshouldnotbeconsideredinvestmentadvice.DoubleLineFundsaredistributedbyQuasarDistributors,LLC.WhiletheFundsarenoload,managementfeesandotherexpensesstillapply.Pleaserefertotheprospectusforfurtherdetails.Fundholdingsandsectorallocationsaresubjecttochangeandarenotrecommendationstobuyorsellanysecurity.

1

Performance

2

DoubleLineTotalReturnBondFund QuarterEndingMarch31,2014

Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheoriginalcost.Currentperformanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrenttothemostrecentmonthendmaybeobtainedbycalling2136338200orbyvisitingwww.doublelinefunds.com.BarclaysUSAggregateIndexrepresentssecuritiesthatareSECregistered,taxable,anddollardenominated.Theindexcoversthe USinvestmentgradefixedratebondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbackedsecurities.Thesemajorsectorsaresubdividedintomorespecificindicesthatarecalculatedandreportedonaregularbasis.Itisnotpossibletoinvestinanindex.PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.*IfaFundinvestedinanaffiliateFundsponsoredbytheAdviserduringtheperiodcoveredbythisreporttheAdviseragreed to notchargeamanagementfeetotheFundinanamountequaltotheinvestmentadvisoryfeespaidbytheaffiliatedFundinrespectoftheFundsinvestmentintheaffiliatedfundtoavoidduplicatechargeoftheinvestmentadvisoryfeestotheinvestors.

QuarterEndMarch31,2014

1Q2014

1YearAnnualized

3YearAnnualized

SinceInceptionAnnualized

(4610to33114)

Ishare 2.40% 1.13% 6.16% 9.34%

Nshare 2.24% 0.88% 5.87% 9.06%

BarclaysU.S.AggregateIndex 1.84% 0.10% 3.75% 4.25%

AsofMarch31,2014 IShare NShare

GrossSEC30DayYield 4.77% 4.51%

NetSEC30DayYield* 4.74% 4.49%


GrossExpenseRatio 0.48% 0.73%

Performance

3

DoubleLineCoreFixedIncomeFund QuarterEndingMarch31,2014

Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheoriginalcost.Currentperformanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrenttothemostrecentmonthendmaybeobtainedbycalling2136338200orbyvisitingwww.doublelinefunds.com.PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.

*IfaFundinvestedinanaffiliateFundsponsoredbytheAdviserduringtheperiodcoveredbythisreporttheAdviseragreed to notchargeamanagementfeetotheFundinanamountequaltotheinvestmentadvisoryfeespaidbytheaffiliatedFundinrespectoftheFundsinvestmentintheaffiliatedfundtoavoidduplicatechargeoftheinvestmentadvisoryfeestotheinvestors.

QuarterEndMarch31,2014

1Q2014

1YearAnnualized

3YearAnnualized

SinceInceptionAnnualized

(6110to33114)

Ishare 2.73% 1.03% 6.17% 7.41%

Nshare 2.57% 0.77% 5.88% 7.14%

BarclaysU.S.AggregateIndex 1.84% 0.10% 3.75% 3.76%


GrossSEC30DayYield 4.00% 3.75%

NetSEC30DayYield* 4.03% 3.78%


GrossExpenseRatio 0.51% 0.76%

UpcomingWebcastAnnouncements

SamGarza June24,2014MultiAssetGrowthGotowww.doublelinefunds.com,HomepageunderEvents2014WebcastScheduletoregister1:15pmPDT/4:15pmEDT

PhilipBarach July8,2014LowDurationGotowww.doublelinefunds.com,HomepageunderEvents2014WebcastScheduletoregister1:15pmPDT/4:15pmEDT

LuzPadilla July22,2014EmergingMarketsFixedIncomeGotowww.doublelinefunds.com,HomepageunderEvents2014WebcastScheduletoregister1:15pmPDT/4:15pmEDT

ToReceivePresentationSlides:[email protected]

4


JeffreyGundlach


June10,2014


TABICurrencyDebasement

http://www.history.com/news/10thingsyoudidntknowaboutthepenny

7RomanCurrencyDebasement240CE 270CE

Source:http://en.wikipedia.org/wiki/Roman_currency#Debasement_of_the_currencyCE=ChristianEra/CommonEra

8RomanDebasement64CE 270CE

Source:http://www.tulane.edu/~august/handouts/601cprin.htm

9U.S.DebasementJanuary1,1913 December31,2009

Source:http://www.zerohedge.com/news/41yearsafterdeathgoldstandardlookhowweendedeconomicpurgatoryFDR=FranklinDelanoRoosevelt,U.S.President19331945.

10

1910vs.TodayPurchasingPower

Source:NewYorkTimes,NewFactsontheIncreasedCostofLiving?,March27,1910.DoubleLineJune30,1910throughDecember31,2013

In1910thepriceforagallonofmilkwas$0.04to$0.05 Today,agallonofmilkis$3.19 Thats4.3%annualchangeoverthepast104yearsandleaves$1of1910moneyworth$0.01today

11

U.S.Dollarvs.RomanDebasement

Source:http://www.zerohedge.com/news/41yearsafterdeathgoldstandardlookhowweendedeconomicpurgatory

12

U.S.HalfPenny

Source:Wikipedia

TheHalfCentwasauthorizedforproductionbytheCoinageActof1792 ItwasdiscontinuedbytheCoinageActof1857 TheHalfCentwasoneofseveralcoinsestablishedbytheCoinageActestablishedbytheU.S.Mint:

HowMuchLongerWilltheU.S.DollarRemaintheReserveCurrencyoftheWorld?

13

Atleast40centralbankshaveinvestedintheYuanandseveralothersarepreparingtodoso,puttingthemainlandcurrencyonthepathtoreservestatusevenbeforefullconvertibility Jukka Pihlman,StandardChartered

94Years(1921 ???)

Source:http://www.zerohedge.com/news/20131013/guestposthowmuchlongerwilldollarbereservecurrency

ChineseYuanAppearstobeonitsWayTowardReserveCurrencyStatus

14January1,2001throughDecember31,2013

Source:Bianco ResearchBitcoin =isapeertopeer paymentsystem introducedasopensourcesoftware in2009bydeveloperSatoshiNakamoto.[4] Thepaymentsinthesystemarerecordedinapublicledgerusingitsownunitofaccount,[5] whichisalsocalledbitcoin.[note1] Thebitcoin systemhasnocentralrepositoryandnosingleadministrator,whichhasledtheUSTreasury tocallbitcoin adecentralizedvirtualcurrency.[8XBTCurncy =Bitcoin CurrencyspotpriceinBloomberg.

Bitcoin SpotPriceJanuary1,2013throughJune3,2014

15

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TABIIU.S.InterestRatesandDemographics

FederalReserveistheLargestHolderofUSDebt

http://www.ritholtz.com/blog/2013/10/allholdersofustreasurydebt/Source:BarryRitholtz,TheBigPicture,AllHoldersofUSDebt,October11,2013

17

U.S.RealGDPForecastNovember15,2012throughMay29,2014

Source:Bianco ResearchGDP=ThegrossdomesticproductisThemonetaryvalueofallthefinishedgoodsandservicesproducedwithinacountry'sbordersinaspecifictimeperiod,thoughGDPisusuallycalculatedonanannualbasis.RealGDP=Isamacroeconomicmeasureofthevalueofeconomicoutputadjustedforpricechanges(i.e.inflationordeflation).Theadjustmenttransformsthemoneyvaluemeasure,nominalGDPintoanindexorquantityortotaloutput.

18

TimingatWhichRateThresholdisReached

19Note:Minack Advisors,January1,2012throughMay31,2014.JuneandJuly2014areforecasts.

20

3MonthEurodollarFuturesNetOpenInterestMay15,1987 May20,2014

Source:U.S.CommoditiesFuturesTradingCommissions(CFTC),DoubleLineCapital.Eurodollar=U.S. dollardenominateddeposits atforeignbanksorforeignbranchesofAmericanbanks.BylocatingoutsideoftheU.S.,EurodollarsescaperegulationbytheFederalReserveBoard.LargeSpeculators:NonCommercialTradingentitythatreportspositionstotheU.S.CommoditiesFuturesTradingCommissions(CFTC)SmallSpeculators:NonCommercialTradingentitythatdoesnotreportpositionstotheCFTC

2,000,000

1,500,000

1,000,000

500,000

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500,000

1,000,000

1,500,000

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SmallSpeculatorsNet

LargeSpeculatorsNet

21

5YearUSTreasuryFuturesNetOpenInterestMay15,1987 May20,2014

300,000

200,000

100,000

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500,000

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LargeSpeculatorsNet

Source:U.S.CommoditiesFuturesTradingCommissions(CFTC),DoubleLineCapitalLargeSpeculators:NonCommercialTradingentitythatreportspositionstotheU.S.CommoditiesFuturesTradingCommissions(CFTC)SmallSpeculators:NonCommercialTradingentitythatdoesnotreportpositionstotheCFTC

22

10YearUSTreasuryFuturesNetOpenInterestMay15,1987 May20,2014

500,000

400,000

300,000

200,000

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23

15+YearUSTreasuryFuturesNetOpenInterestMay15,1987 May20,2014

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GlobalRealRates(10yrminusCPI)June1,2008throughJune3,2014

Source:BloombergUSGG10Y=USgeneric10YearUSTreasury.GTJP10Y=Japanesegeneric10yearTreasury.GTAUD10Y=Australiangeneric10YTreasury.GTESP10Y=Spanishgeneric10yearTreasury.GTDEM10=Germangeneric10yearTreasury.CPI=ConsumerPriceIndex.CPI=ConsumerPriceIndexproducesmonthlydataonchangesinthepricespaidbyurbanconsumersforarepresentativebasketofgoodsandservices.Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions

24

U.S.DollarIndexSpotDecember31,2007throughJune10,2014

Source:BloombergFinancialServices,DoubleLineCapitalLPDXY=DXYistheUSDollarIndex(USDX)indicatesthegeneralvalueoftheUSdollar.AverageexchangeratesbetweentheUSdollarandsixmajorworldcurrencies.Aninvestmentcannotbemadedirectlyinanindex.

25

Source:Bianco Research

0%

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1619 2024 2534 3544 4554 5564 65+

26

LaborForceParticipationRatesByAgeJanuary1,1948throughApril30,2014

Source:USCensus;http://www.census.gov/prod/2014pubs/p251140.pdf27

DependencyRatiosintheU.S.19402050January1,1940projectedthrough2050

Source:USCensus;http://www.census.gov/prod/2014pubs/p251140.pdf28

DependencyRatiosJanuary1,2012Projectedthrough2050

Source:FiveThirtyEight EconomicsWhatBabyBoomersRetirementMeansfortheU.S.Economy,May7,2014http://fivethirtyeight.com/features/whatbabyboomersretirementmeansfortheuseconomy

29

Americans65YearsandOlderAsofMay7,2014:Projections2015through2060

30

65YearsandOlderAmericansvs.OtherCountriesAsofMay7,2014:Projectionstherestof2014through2050

Source:FiveThirtyEight EconomicsWhatBabyBoomersRetirementMeansfortheU.S.Economy,May7,2014http://fivethirtyeight.com/features/whatbabyboomersretirementmeansfortheuseconomy

31

ProjectedU.S.PopulationGrowthJanuary1,2012throughDecember31,2012thenProjected2013*through2060

Source:FiveThirtyEight EconomicsWhatBabyBoomersRetirementMeansfortheU.S.Economy,May7,2014http://fivethirtyeight.com/features/whatbabyboomersretirementmeansfortheuseconomy*2013arestillestimatedandthereforeareprojectionsforpurposesofthischart.

TABIIIGlobalMarkets

GlobalInterestRatesAsofJune4,2014

33

2.602.34

5.98

3.72

0.60 0.73

2.65

1.811.41

2.603.00 2.85

1.76

2.73

1.91

3.66

9.37

4.04

2.29

8.38 8.60

8.02

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Global10yearBondYields

Source:Bloomberg

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(

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GlobalInterestRates

34Note:Minack AdvisorsasofApril30,2014

ShanghaiIndexDecember31,2009throughJune10,2014

Source:BloombergFinancialServices,DoubleLineCapitalLPNote:TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedontheShanghaiStockExchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100.Aninvestmentcannotbemadedirectlyinanindex.

35

DownwardRevisionstoChinaGrowthExpectationsin2014January1,2010throughMarch31,2014

36

7

7.5

8

8.5

9

9.5

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10.5

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MedianForecastofChinaRealGDP(byyear)

2010

2011

2012

2013

2014

Days LeadingUptoForecast(TradingDays)

Thelast3 yearshavebeenastoryofdownwardrevisionstogrowthinChina.

Source:BloombergGDP=ThegrossdomesticproductisThemonetaryvalueofallthefinishedgoodsandservicesproducedwithinacountry'sbordersinaspecifictimeperiod,thoughGDPisusuallycalculatedonanannualbasis.

ChineseRenminbi SpotPerformance

Source:Bloomberg,DoubleLine.CNY=ChineseRenminbi (yuan)istheofficialcurrencyofThePeoplesRepublicofChina.ThecurrencyisquotedasthespotpriceandinU.S.Dollars,September1,2010throughMay3,2014

37

38

EmergingMarketsRelativetoDevelopedWorldLastFiveYears(6508to6914)

Source:BloombergMXEFIndex=TheMSCIEmergingMarketsIndexisafreefloatweightedequityindex.MXWOIndex=TheMSCIWorldIndexisafreefloatweightedequityindex.Itwasdevelopedwithabasevalueof100asofDecember31,1969.Itincludesdevelopedworldmarketsanddoesnotincludeemergingmarkets.Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions

39

EmergingMarketsRelativetoDevelopedWorldLastTenYears(6704to6914)

Source:BloombergMXEFIndex=TheMSCIEmergingMarketsIndexisafreefloatweightedequityindex.MXWOIndex=TheMSCIWorldIndexisafreefloatweightedequityindex.Itwasdevelopedwithabasevalueof100asofDecember31,1969.Itincludesdevelopedworldmarketsanddoesnotincludeemergingmarkets.Aninvestmentcannotbemadeinanindexdirectly.Pleaseseeappendixforindexdefinitions

MarginBorrowingCPIAdjustedMarch31,1959throughApril30,2014

Source:BloombergFinancialServices,DoubleLineCapitalLPMARGDEBT=MargindebtIndexistheNewYorkStockExchangeMemberFirmsdebitbalancesinmarginaccounts.CPI=ConsumerPrice IndexAninvestmentcannotbemadedirectlyinanindex.Pleaseseeappendixfordefinitions. 40

Lumbervs.HomebuildersIndexDecember31,2009throughJune10,2014

Source:BloombergFinancialServices,DoubleLineCapitalLPLB1COMD=IstheRandomLengthLumberFuturescontractspecifies110,000boardfeet(one73flatcar)ofrandomlength820softwood2x4s.SPSIHOTRIndex=S&PHomebuildersIndexisdesignedtomeasuretheperformanceofnarrowGICS subindustries.TheIndexcomprisesstocksint ehS&PTotalMarketIndexthatareclassifiedintheGICShomebuildingsubindustry.An investment cannot be made directly in an index

41

TABIIIBloodlessVerdictoftheMarket

BofA/MerrillFixedIncomeIndexReturns

DataSource:BofA/MerrillLynchIndicesthroughyearendDecember31,2013andJune9,2014fortherespectiveyearsindicated.PleaseseetheAppendixforindexdefinitions.Aninvestmentcannotbemadedirectlyinanindex.

2.57%

3.29%

2.62%

5.07%

9.37%

5.08%

7.41%

3.21%

1.40%

0.01%

1.46%

5.79%

7.38%

26.60%

Government(G0A0)

Mortgages(MOAO)

InternationalDeveloped(NOGO)

Corporate(COAO)

InternationalEmerging(IGOV)

HighYield(JOAO)

Convertibles(VOSO)

Grey=Year2013Blue=YearToDate2014

43

BofA/MerrillFixedIncomeIndexReturns

4.60%

4.31%

6.16%

4.62%

5.53%

4.88%

4.27%

1.82%

0.95%

7.44%

5.19%

13.28%

AAARatedCredit(COA1)

ARatedCredit(COA3)

BBBRatedCredit(COA4)

BRatedHighYield(JOA2)

BBRatedHighYieldCredit(JOA1)

CCCRatedHighYield(JOA3)

InvestmentGrade=IndicesratedAAAtoBBB (shownabove)areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB orhigherbyStandard&PoorsorBaa3byMoodys.Thehighertherating,themorelikelythebondistopaybackatpar/$100cents onthedollar.AAAisconsideredthehighestqualityandthelowestdegreeofrisk.Theyareconsideredtobestableanddependable.BelowInvestmentGrade=Alsoknownasjunkbond(shownabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenashavinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopaybackatpar/$100centsonthedollar.CreditdistributionfromthehighestavailablecreditratingfromanyNationallyRecognizesStatisticalRatingOrganization(S&P,Moodys,andFitch).Source:BofA/MerrillLynchIndices asofDecember31,2013andJune9,2014andfortheirrespectiveyearsindicated.PleaseseeappendixforIndexdefinitionsAninvestmentcannotbemadedirectlyinanindex.

Grey=Year2013Blue=YearToDate2014

44

Current30YearCumulativeTotalReturnPeaktoTroughAsMeasuredbytheBofAMerrillLynchCurrent30YearUSTreasuryIndex

Source:Bloomberg,BankofAmericaMerrillLynch.Dateranges:October15,1993throughJune12,1995andJuly25,2012throughMarch10,2014.Current30YUSTreasuryIndex(GA30).Youcannotinvestdirectlyinanindex.

45

46Source:Bianco Research.January1,1974throughApril30,2014

USRates:30yearU.S.TreasuryPosting3rd StrongestYearToDateReturnsince1974

30-Year Treasury Year-To-Date Total ReturnsEvery Year Since 1974

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 252 264# Of Trading Days Since Jan 1

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2009

1986 1995

2014

2008

HousingandMBSMarketTrendsTABIV

Source:BloombergFinancialServicesTheBloombergECOSurpriseIndex(ESI)shows thedegreetowhicheconomicanalystsunder or overestimatethetrendsinthebusinesscycle. Thesurpriseelementisdefinedasthepercentage (orpercentagepoint)differencebetweenanalyst forecastsandthepublishedvalueofeconomic datareleases.Youcannotinvestdirectlyinanindex.

BloombergHousingSurpriseIndex

48

NewHomeSales LastTenYears

Source:BloombergFinancialServicesNHSLTOTIndex=U.S.NewOnefamilyhousessoldannually.Theindextrackssalesofnewlyconstructedhomesduringthereference period.Aninvestmentcannotbemadeinanindexdirectly. 49

Source:NationalAssociationofRealtorsMay1,2011throughMarch31,2014

WhereAretheFirstTimeBuyers?

50

UbiquitousAffordabilityChartJanuary1,2000throughMarch31,2014

51

Source:BloombergFinancialServicesHomebuyerAffordabilityCompositeIndex(AFFDCMOM)=Trackstheaffordabilityofhousingtypicallybasedonamixofmedianhome prices,medianincomeandmortgagerates.Aninvestmentcannotbemadedirectlyinanindex.

ActualHomeAffordabilityCalculation:California

52

2004 Dec06 Mar14Rate 4.50% 5.50% 2.00% 4.25%

RateType 5/1IO 5/1IO OptionPAY 30YrFixed

MedianPrice $451,068 $ 569,560 $569,560 $435,470

Payment $1,692 $2,610 $949 $2,142

Average $1780

Source: DoubleLineCapitalAsofDecember31,2004,December31,2006andMarch31,2014.IO=InterestOnlyLoan.OptionPay=Theborrowerhasfourpaymentoptionseachmonthtopaythemortgagebasedonpaymentofprincipalandinterest.30yr fixed=A30yearfixedratemortgagewherethemortgageretainsthesameinterestrateforthelifeoftheloanorthe30years.

HousingAffordability

53

Source: DoubleLineCapital.June30,1998throughMarch31,2014.Thisisahypotheticalexampledemonstratingthepaymentofamortgageusingdifferentinterestratescenarios.Thepurposeistodemonstratethatwitharisinginterestratethepaymentofthemortgagegoesupbecausetheborrowerispayingmoreinterest.

54

Source:http://www.federalreserve.gov/boarddocs/snloansurvey/201405/fullreport.pdfThe primecategoryofresidentialmortgagesincludesloansmadetoborrowersthattypicallyhadrelativelystrong,welldocumentedcredithistories,relativelyhighcreditscores,andrelativelylowdebttoincomeratiosatthetimeoforigination.Thiswouldincludefullyamortizingloansthathave afixedrate,astandardadjustablerate,oracommonhybridadjustableratethoseforwhichtheinterestrateisinitiallyfixedforamultiyearperiodandsubsequentlyadjustsmorefrequently.Thenontraditionalcategoryofresidentialmortgagesincludes,butisnotlimitedto,adjustableratemortgageswithmultiplepaymentoptions,interestonlymortgages,and``AltA''productssuchasmortgageswithlimitedincomeverificationandmortgagessecuredbynonowneroccupiedproperties.(Pleaseexcludestandardadjustableratemortgagesandcommonhybridadjustableratemortgages.)Thesubprimecategoryofresidentialmortgagestypicallyincludesloansmadetoborrowersthatdisplayedoneormoreofthefollowingcharacteristicsatthetimeoforigination:weakenedcredithistoriesthatincludepaymentdelinquencies,chargeoffs,judgments,and/orbankruptcies;reducedrepaymentcapacityasmeasuredbycreditscoresordebttoincomeratios;orincompletecredithistories.

LendingStandardsTighteningJanuary1,2007throughMarch31,2014

N

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t

%

o

f

D

o

m

e

s

t

i

c

R

e

s

p

o

n

d

e

n

t

s

T

i

g

h

t

e

n

i

n

g

S

t

a

n

d

a

r

d

s

f

o

r

R

e

s

i

d

e

n

t

i

a

l

M

o

r

t

g

a

g

e

L

o

a

n

s

Source:BloombergFinancialServicesMBAVREFI=MortgageRefinancingIndexasmeasuredbytheMortgageBankersAssociationreflectsthenumberofapplicationsforrefinance.Notallapplicationsareaccepted.Aninvestmentcannotbemadedirectlyinanindex.

MortgageRefinancingIndexJune13,2003throughMay30,2014

55

ABXAAA071IndexDecember31,2009throughJune10,2014

Source:BloombergFinancialServices,DoubleLineCapitalLPTheABX071AAAIndexisabasketofhomeequity.Constitutedfromreferenceobligationsissuedby20issuersofresidentialmortgagebackedsecurities.Aninvestmentcannotbemadedirectlyinanindex.

56

NonAgencyResidentialMortgageBackedSecurities(RMBS)60++DelinquencyRateJanuary1,2005throughMay31,2014

SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREOstatus.PrimedefinedasFICO>725andLTV725andLTV>=75SubprimedefinedasFICO

NonAgencyRMBSConditionalDefaultRateJanuary1,2005throughMay31,2014

RMBS=ResidentialMortgageBackedSecuritiesSeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREOstatus.PrimedefinedasFICO>725andLTV725andLTV>=75SubprimedefinedasFICO

NonAgencyRMBSLossSeverityJanuary1,2005throughMay31,2014

RMBS=ResidentialMortgageBackedSecuritiesSeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREOstatus.PrimedefinedasFICO>725andLTV725andLTV>=75SubprimedefinedasFICO

NonAgencyRMBSConditionalRepaymentRateJanuary31,2005throughMay31,2014

RMBS ResidentialMortgageBackedSecurities.CRR=ConditionalRepaymentRate.SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREOstatus.PrimedefinedasFICO>725andLTV725andLTV>=75SubprimedefinedasFICO

DoubleLineFundsOverview

TABV

PortfoliostatisticsasofMay30,2014basedonmarketweightedaverages.Subjecttochangewithoutnotice.

Averageprice=Ameasureoftheweightedaveragepricepaidforthesecuritiescalculatedbytakingthepricesanddividingbythenumberofsecuritiesanddoesnotincludecash.Averagepriceshouldnotbeconfusedwithnetassetvalue.AverageDuration =Durationisusedasariskmeasure.Itmeasuresthepricevolatilityofasecuritygivenachangeininterestratemovements.AverageLife=Theaveragenumberofyearsthateachdollarofunpaidprincipaldueonthemortgageremainsoutstanding.Averagelifeiscomputedastheweightedaveragetimetothereceiptofallfuturecashflows,usingastheweightsthedollaramountsoftheprincipalpaydowns.

Source:DoubleLineCapitalLP

TotalReturnBondFundPortfolioStatistics

Total ReturnBondFund

BarclaysCapitalU.S.AggregateIndex

AveragePrice $97.73 $105.75

Duration 3.38 5.61

Average Life 5.20 7.69

62

PortfoliocompositionasofMay30,2014.Subjecttochangewithoutnotice.Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.

Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalancesheetsthatmayincludesecuritiesthatmaturewithin90days.Government U.S.treasurysecurities.Agency=MortgagesecuritieswhoseprincipalandinterestguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC).NonAgency=ResidentialMortgagesBondSecuritiesareatypeofbondbackedbyresidentialmortgages.NonAgencymeanstheywereissuedby aprivateissuer.CMBS =CommercialMortgageBackedSecurities.Securitizedloansmadeoncommercialratherthanresidentialproperty.Other=CollateralizedMortgageObligations(CLOs)

TotalReturnBondFundPortfolioCompositionBySecurityType

63

Cash 8.5%

Government 5.9%

Agency 47.9%

NonAgency 27.9%

CMBS 6.4%

CLO 3.1% Other 0.3%

PortfoliocompositionasofMay30,2014. Subjecttochangewithoutnotice.Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.

Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalancesheetsthatmayincludesecuritiesthatmaturewithin90days.PassThrough=MortgagepassthroughsecuritieswhoseprincipalandinterestguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC)ornonagencyprivateissuewithnogovernmentguarantee.CMOCurrent=CollateralizedMortgageObligation(CMO)isafinancialdebtvehicle/specialpurposeentitycalledapool.Investorsbuybondsissuedbytheentityandreceivepaymentsaccordingtoadefinedsetofrules.Themortgagesthemselvesarethecollateral,thebondsarethetranches(alsocalledclasses),andthesetofrulesthatdictateshowmoneyisreceivedfromthecollateralwillbedistributediscalledthestructure.Thelegalentity,collateralandstructurearecollectivelyreferredtoasthedeal.IO =InterestOnlymortgagepoolsinwhichtheborrowersmonthlypaymentisonlytowardtheinterestontheloan.Anonamortized loan.InverseFloater=Amortgagepoolthathasayieldthatisinverselyrelatedtointerestrates.IOCurrentpay =Loansthatarecurrentlyreceivingprincipalpayments.LockedOut/CMOLockedOut=Loansthatforasetperiodoftimewillnotreceiveprincipalpayments.

64

TotalReturnBondFundPortfolioCompositionByAgencyCollateralizeMortgageObligation(CMO)SecurityType

Cash,8.5% InverseFloater,1.4%

PassThrough,28.3%

CMOCurrent,8.0%

CMOLocked,9.3%

IOCurrent,0.9% IOLocked,0.0%

AgencyCMOComposition

Cash 8.5%InverseFloater 1.4%PassThrough 28.3%CMOCurrent 8.0%CMOLocked 9.3%IOCurrent 0.9%IOLocked 0.0%

Subtotal 56.5%

Portfoliocompositionandcreditratingsasofsecurityorigination.Portfoliocompositionissubjecttochangewithoutnotice.TherearesomenonratedsecuritiesintheFundasshowninthegraphabove.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognized StatisticalRatingOrganization(S&P,Moodys,andFitch).

InvestmentGrade=SecuritiesratedAAAtoBBB areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB orhigherbyStandard&PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikelythebondistopayback atpar/$100centsonthedollar.AAAisconsideredthehighestqualityandthelowestdegreeofrisk.Theyareconsideredtobeextremelystableanddependable.BelowInvestmentGrade=AlsoknownasjunkbondisasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinordertomakethemattractive.They arelesslikelytopaybackatpar/$100centsonthedollar.NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies.CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund.Source:DoubleLineCapitalLPasofMay30,2014.

TotalReturnBondFundPortfolioNonAgencyResidentialMortgageBackedSecurities(RMBS)BreakdownByOriginalRating

65

AAA85%

AA1%

A0%

BBB2%

NR12%

TotalReturnBondFundPortfolioNonAgencyRMBSBreakdownByCurrentCreditQuality

PortfoliocompositionasofMay30,2014.Portfoliocompositionissubjecttochangewithoutnotice.Therearesomenonratedsecuritiesintheportfolioasshowninthechartabove.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch).InvestmentGrade=SecuritiesratedAAAtoBBB (showninblueabove)areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB ofhigherbyStandard&PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikely thebondistopaybackatpar/$100centsonthedollar.AAAisconsideredthehighestqualityandthelowestdegreeofrisk.Theyareconsideredtobeextremelystableanddependable.BelowInvestmentGrade=Alsoknownasjunkbond(showningreyabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenashavinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopaybackatpar/$100centsonthedollar.CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund.NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies.RMBS=ResidentialMortgageBackedSecurities.Source:DoubleLineCapitalLP

66

AAA,0.1%AA,0.1%

A+,0.8% A,0.3% A,0.1%BBB+,0.2%

BBB,0.1%BB+,0.4%

BB,0.2%

BB,0.2%

B+,0.5%B,1.2%

B,0.9%

CCC+,1.7%

CCC,6.2%

CCC,3.9%

CC,2.2%C,0.1%

D,5.6%

NR,3.1%

TotalReturnBondFundPortfolioNonAgencyRMBSBreakdownByPrice

PortfoliopricecompositionasofMay30,2014.Subjecttochangewithoutnotice.Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.

DollarPrice

%

o

f

F

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n

d

67

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

CoreFixedIncomeFundPortfolioStatistics

PortfoliostatisticsasofMay30,2014basedonmarketweightedaverages.Subjecttochangewithoutnotice.

Averageprice=Ameasureoftheweightedaveragepricepaidforthesecuritiescalculatedbytakingthepricesanddividingbythenumber of securitiesanddoesnotincludecash.Averagepriceshouldnotbeconfusedwithnetassetvalue.AverageDuration=Durationisusedasariskmeasure.Itmeasuresthepricevolatilityofasecuritygivenachangeininterestratemovements.AverageLife=Theaveragenumberofyearsthateachdollarofunpaidprincipaldueonthemortgageremainsoutstanding.Averagelifeiscomputedastheweightedaveragetimetothereceiptofallfuturecashflows,usingastheweightsthedollaramountsoftheprincipalpaydowns.

Source:DoubleLineCapitalLP

CoreFixedIncomeFund

BarclaysCapitalU.SAggregateIndex

AveragePrice $102.42 $105.75

Duration 4.52 5.61

Average Life 6.57 7.69

68

PortfoliocompositionasofMay30,2014.Subjecttochangewithoutnotice.BankLoans=Adebtfinancingobligationissuedbyabankorsimilarfinancialinstitutiontoacompany.CommercialMortgageBackedSecurities(CMBS)=CommercialMortgageBackedSecurities.Securitizedloansmadeoncommercialratherthanresidentialproperty.CollateralizedLoanObligations(CLOs)=AformofsecuritizationwherepaymentsfrommultiplemiddlesizedandlargebusinessloansarepooledtogetherandpassedontodifferentclassedofownersinvarioustranchesCash =Cashholdingincludethevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalancesheetsthatmayincludesecuritiesthatmaturewithin90days.Government=Governmentdebt(alsoknownaspublicdebtornationaldebt)ismoney(orcredit)owedbyanylevelofgovernment;eithercentralgovernment,federalgovernment,municipalgovernmentorlocalgovernment.MortgageBackedSecurities(MBS)=Amortgagebackedsecurity(MBS)isanassetbackedsecurityordebtobligationthatrepresentsaclaimonthecashflowsfrom mortgageloans,mostcommonlyonresidentialpropertyEmergingMarketsFixedIncome=Emergingmarketdebt(EMD)isatermusedtoencompassbondsissuedbylessdevelopedcountries.InvestmentGrade(IG)andHighYieldCorporates(HY)=Investmentgradeandnoninvestmentgradecorporatecredit.Bondsissuedbycorporationstoraisemoneyinordertoexpanditsbusiness.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch).AbondratedBBBorhigherwouldbeconsideredInvestmentGrade.AnybondratedBBBorbelowwouldbeHighYield.Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.

CoreFixedIncomeFundPortfolioComposition

69

Cash3%

Govt19%

MBS29%EM

15%

IGCorporate15%

CMBS7%

BankLoans6%

HYCorporate3%

CLO3%

PortfoliocompositionandcreditratingsasofMay30,2014.Portfoliocompositionissubjecttochangewithoutnotice.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch).

Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds, banker'sacceptances,cashequivalentsonbalancesheetsthatmayincludesecuritiesthatmaturewithin90days.Government =Governmentdebt(alsoknownaspublicdebtornationaldebt)ismoney(orcredit)owedbyanylevelofgovernment;eithercentralgovernment,federalgovernment,municipalgovernmentorlocalgovernment.Agency =MortgagesecuritieswhoseprincipalandinterestareeffectivelyguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC).InvestmentGrade=AbondisconsideredinvestmentgradeifitscreditratingisBBB ofhigherbyStandard&PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikelythebondistopaybackatpar/$100centsonthedollar.BelowInvestmentGrade(BelowIG)=Alsoknownasjunkbondisasecurityratedbelowinvestmentgrade.Thesebondsareseenashavinghigherdefaultriskor otheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinordertomakethemattractive.Theyarelesslikelytopaybackatpar/$100centsonthedollar.CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund.NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies.Source:DoubleLineCapitalLP.

CoreFixedIncomeFundPortfolioCreditQualityBreakdown

70

Cash3%

Govt19%

Agency16%

InvestmentGrade32%

BelowIG28%

Unrated2%


JeffreyGundlach


June10,2014


IndexDescriptionsBarclaysCapitalUSAggregateIndex TheBarclaysCapitalUSAggregateIndexrepresentssecuritiesthatareSECregistered, taxable,anddollardenominated.TheindexcoverstheUSinvestmentgradefixedratebondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbackedsecurities.Thesemajorsectorsaresubdividedintomorespecificindicesthatarecalculatedandreportedona regularbasis.BarclaysCapitalUSTreasuryIndex ThisindexistheUSTreasurycomponentoftheUSGovernmentindex.PublicobligationsoftheUSTreasurywitharemainingmaturityofoneyearormore.BarclaysCapitalUSTreasury10YearIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex.BarclaysCapitalCapitalUSTreasury30YearIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex.BarclaysCapitalUSHighYieldIndex TheBarclaysCapitalUSHighYieldIndexcoverstheuniverseoffixedrate,noninvestmentgradedebt.Eurobondsanddebtissuerfromcountriesdesignatedasemergingmarkets(e.g.Argentina,Brazil,Venezuela,etc.)areexcluded,butCanadianand globalbonds(SECregistered)ofissuersinnonEMGcountriesareincluded.Originalissuezereos,stepupcouponstructures,144Asandpayinkind(PIK,asofOctober1,2009)arealsoincluded.BofAMerrillLynchUSGovernmentIndex(GOAO) TheMerrillLynchUSGovernmentIndextrackstheperformanceofUSgovernment(i.e.securitiesintheTreasuryandAgencyindices.)BofAMerrillLynchUS15+YearTreasuryIndexLongTreasuries(G802) ThisindexisasubsetoftheBofAMerrillLynchUSTreasuryIndexincludingallsecuritieswitharemainingtermoffinalmaturitygreaterthan15years..BofAMerrillLynchUSCorporateIndex(COAO)InvestmentGrade TheMerrillLynchCorporateIndextrackstheperformanceofUSdollardenominatedinvestmentgradecorporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$250MM.BofAMerrillLynchUSAllConvertiblesIndex(VOSO) TheMerrillLynchAllConvertibleIndexisaruledrivenindex.whichincludesallbondsandpreferredstocksofU.S.registeredcompanies,whichhave$50millionormoreinaggregatemarketvalueandareconvertiblesinU.S.dollardenominatedcommonstocks,ADRsorcashequivalents.Pleasenoteaninvestorcannotinvestdirectlyinanindex.CRBCommodityIndex(CRY) Anunweightedgeometricaverageofsomeimportantcommodities.Itaveragespricesacross17commoditiesandacrosstime.Theindextracksenergy,grains,industrials,livestock,preciousmetals,andagriculturals.S&P500(SPX) S&P500isafreefloatcapitalizationweightedindexpublishedsince1957ofthepricesof500largecapcommonstocksactively tradedintheUnitedStates.StandardDeviation Sigma=standarddeviation.Itshowshowmuchvariationthereisfromtheaverage(mean,orexpected/budgetedvalue).Alow standarddeviationindicatedthatthedatapointtendtobeveryclosetothemean,whereashighstandarddeviationindicatedthatthe dateisspreadoutoveralargerangeofvalues.DowJones UBSDJCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU.S.exchanges,withtheexceptionofaluminum,nickelandzinc,whichtradeontheLondonMetalExchange(LME).Copper=CopperSpotPrice(HGI)Copperistheworldsthirdmostusedmetalbehindironandaluminumprimarilyusedinhighlycyclicalindustriesincludingconstructionandindustrialmachinerymanufacturing.SpotpricequotedinUSD/lb.Gold=GoldSpotPrice(Golds)TheGoldSpotpriceisquotedasUSDollarperTroyOunce.CrudeOil=Crudeoilvariesgreatlyinappearancedependingonitscomposition.WestTexasintermediate(WTI)=Texaslightsweetcrudeisusedasabenchmarkinoilpricing.Itslightbecauseofthelowdensityandsweetbecauseoflowsulfur.Brentcrude=Isamajortradingclassificationofsweetlightcrude.BrentistheoilmakeralsoknownasBrentBlend.VolatilityIndex(VIX)TheVIXshowsthemarket'sexpectationof30dayvolatility.Itisconstructedusingtheimpliedvolatilitiesofawiderangeof S&P500indexoptions. Thisvolatilityismeanttobeforwardlookingandiscalculatedfrombothcallsandputs. TheVIXisawidelyusedmeasureofmarketriskandisoftenreferredtoas the"investorfeargauge". 72

getIndexA1U.S. AggrIWS?requBack to In

IndexDescriptions

BofAMerrillLynchUSDollarEmergingMarketsSovereignPlusIndex(IGOV)ThisindextrackstheperformanceofUSdollardenominatedemergingmarketandcrossoversovereigndebtpubliclyissuedintheeurobondorUSdomesticmarket.QualifyingcountriesmusthaveaBB1orlowerforeigncurrencylongtermsovereigndebtrating(basedonanaverageofMoodys,S&P,andFitch).BofAMerrillLynchU.S.HighYieldCashPayIndex(J0A0)BelowInvestmentGradeTheMerrillLynchHighYieldIndextrackstheperformanceofUSdollardenominatedbelowinvestmentgradecorporatedebt,currentlyinacouponpayingperiod,thatispubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveabelowinvestmentgraderating(basedonanaverageofMoodys,S&PandFirthforeigncurrencylongtermsovereigndebtratings).Musthaveoneyearremainingtofinalmaturityandaminimumoutstandingamountof$100MM.BofAMerrillLynchInternationalGovernmentIndex(NOGO)TheMerrillLynchInternationalIndextrackstheperformanceofAustralia,Canadian,French,German,Japan,Dutch,SwissandUKinvestmentgradesovereigndebtpubliclyissuedanddenominatedintheissuersowndomesticmarketandcurrency.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstanding.BofAMerrillLynchMortgageBackedSecuritiesIndex(MOA0)ThisindextrackstheperformanceofUSdollardenominatedfixedrateandhybridresidentialmortgagepassthroughsecuritiespubliclyissuedbyUSagenciesintheUSdomesticmarket.30year,20year,15yearandinterestonlyfixedratemortgagepoolsareincludedintheIndexprovidedtheyhaveatleastoneyearremainingtermtofinalmaturityandaminimumamountoutstandingofatleast$5billionpergenericcouponand$250MMperproductionyear withineachgenericcoupon.BofAMerrillLynchU.S.MunicipalSecuritiesIndex(UOA0)ThisindextrackstheperformanceofUSdollardenominatedinvestmentgradetaxexemptdebtpubliclyissuedbyUSstatesandterritories,andtheirpoliticalsubdivisions,intheUSdomesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaninvestmentgraderating(basedonMoodys,S&PandFitch).Minimumsizevarybasedontheinitialtermtofinalmaturityattime ofissuance.BarclaysCapitalGlobalEmergingMarketsIndex TheBarclaysCapitalGlobalEmergingMarketsIndexrepresentstheunionoftheUSDdenominatedUSEmergingMarketsindexandthepredominatelyEURdenominatedPanEuroEmergingMarketsIndex,coveringemergingmarketsinthefollowingregions:Americas,Europe,MiddleEast,Africa,andAsia.AswithotherfixedincomebenchmarksprovidedbyBarclaysCapital,theindexisrulesbased,whichallowsforanunbiasedviewofthemarketplaceandeasyreplicability.JPMorganInvestmentGradeCorporateIndex JPMorganInvestmentGradeCorporateIndexincludesperformanceofUSdollardenominatedinvestmentgradecorporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$250MM.DrawDown Thepeaktotroughdeclineduringaspecificrecordperiodofaninvestment,fundorcommodity.Adrawdownisusuallyquotedasthepercentagebetweenthepeakandthetrough.NAV Amutualfund'spricepershareorexchangetradedfund's(ETF)persharevalue.Inbothcases,thepersharedollaramountof thefundiscalculatedbydividingthetotalvalueofallthesecuritiesinitsportfolio,lessanyliabilities,bythenumberoffundsharesoutstanding.CMO Atypeofmortgagebackedsecuritythatcreatesseparatepoolsofpassthroughratesfordifferentclassesofbondholderswith varyingmaturities,calledtranches.Therepaymentsfromthepoolofpassthroughsecuritiesareusedtoretirethebondsintheorderspecifiedbythebonds'prospectusTIPS TreasuryInflationProtection.Atreasurysecuritythatisindexedtoinflationinordertoprotectinvestorsfromthenegativeeffectsofinflation.TIPSareconsideredanextremelylowriskinvestmentsincetheyarebackedbytheU.S.governmentandsincetheirparvalueriseswithinflation,asmeasuredbytheConsumerPriceIndex,whiletheirinterestrateremainsfixed.CPI ConsumerPriceIndex.Ameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices,such astransportation,foodandmedicalcare.CashFlow Cashflowmeasuresthecashgeneratingcapabilityofacompanybyaddingnoncashcharges(e.g.depreciation)andinterestexpensetopretaxincome.73

IndexDescriptionsBofA/MerrillLynchHighYieldCashPayCCCratedIndex(JOA3) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonCCCratedHighYieldcreditonly.BofA/MerrillLynchHighYieldCashPayBBratedIndex(JOA1) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonBBratedHighYieldcreditonly.BofA/MerrillLynchHighYieldCashPayBratedIndex(JOA2) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonBratedHighYieldcreditonly.BofA/MerrillLynchCreditIndexBBBratedIndex(COA4) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthelowerratedBBBinvestmentgradecredits.BofA/MerrillLynchCreditIndexAratedIndex(COA3) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingontheAratedinvestmentgradecredits.BofA/MerrillLynchCreditIndexAAAratedIndex(COA1) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthehighestratedAAAinvestmentgradecredits.BofAMerrillLynchUSTreasuryIndex(G0Q0)TheMerrillLynchUSTreasuryIndextrackstheperformanceofUSdollardenominatedsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinal maturity,afixedcouponscheduleandaminimumamountoutstandingof$1billion.BofAMerrillLynchUS1015YearTreasuryIndexLongTreasuryTheMerrillLynchUS1015TreasuryIndextrackstheperformanceofUSdollardenominated1015yearsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.ItisasubsetoftheBofAMerrillLynchU.S.TreasuryIndex(GOQO).BofAMerrillLynchMunicipalIndexTheMerrillLynchMunicipalBofAMerrillLynchCurrent10yearUSTIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex.BofAMerrillLynchCurrent30yearUSTIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex.JPMorganCorporateEMBIBroadDiversifiedIndex(JBCDCOMP) Thisindextrackstheperformanceofinvestmentgradecorporatedebtpublicallyissuedacrossarangeofemergingmarketcountries.ShanghaiIndex TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedontheShanghaiStockExchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100.S&P/CaseShillerCompositeHomePriceIndex TheCaseShillerHomePriceIndices,onecomprisedofpricechangeswithinall20metropolitanmarkets,andanothercomprisedofpricechangeswithinthefollowingsubsetof10metropolitanmarkets:Boston,Chicago,Denver,LasVegas,LosAngeles,Miami,NewYork,SanDiego,SanFranciscoandWashingtonDC.Inadditiontothose10markets,the20HomePriceindexreflectspricechangesforAtlanta,Charlotte,Dallas,Detroit,Minneapolis,Phoenix,Portland,SeattleandTampa.NASDAQ Acomputerizedsystemthatfacilitatestradingandprovidespricequotationsonmorethan5,000ofthemoreactivelytradedover thecounterstocks.Createdin1971,theNasdaqwastheworld'sfirstelectronicstockmarket.Transports TheIndustrialsSectorincludescompanieswhosebusinessesaredominatedbyoneofthefollowingactivities:Themanufactureand distributionofcapitalgoods,includingaerospace&defense,construction,engineering&buildingproducts,electricalequipmentandindustrial machineryUtilities Apublicutilityisabusinessthatfurnishesaneverydaynecessitytothepublicatlarge.Publicutilitiesprovidewater,electricity,naturalgas,telephoneservice,andotheressentials.Utilitiesmaybepubliclyorprivatelyowned,butmostareoperatedasprivatebusinesses.BasisPoint Abasispointisaunitthatisequalto1/100th of1%,andisusedtodenotethechangeinafinancialinstrument.REIT RealEstateTrust.Asecuritythatsellslikeastockonthemajorexchangesandinvestsinrealestatedirectly,eitherthrough propertiesormortgagesDuration Durationisacommonlyusedmeasureofthepotentialvolatilityofthepriceofadebtsecurity,ortheaggregatemarketvalueofaportfolioofdebtsecurities,priortomaturity.Securitieswithalongerdurationgenerallyhavemorevolatilepricesthansecuritiesofcomparablequalitywithashorterduration.

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IndexDescriptionsBofA/MerrillLynchInflationLinkedIndex(G0Q1) TheBofAMerrillLynchUSInflationLinkedTreasuryIndextrackstheperformanceofUSdollardenominatedinflationlinkedsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.CitigroupTIPS(SBUSILSI) . Itmeasuresthereturnsoftheinflationlinkedbondswithfixedratecouponpaymentsthatarelinkedtoaninflationindex.The priceofeachissueintheUSLSIisadjustedbyusinganindexratio.Theindexratioisdeterminedbydividingthecurrentinflationindexlevelbytheinflationindexlevelatthetimeofissueofthesecurity.Theinflationindexispublishedonamonthlybasis,andtheintramonthindexratioiscalculatedusinglinearinterpolation.BarclaysCapitalCMBSIndex trackstheperformanceofUSdollardenominatedsecuritizedcommercialmortgagebackedsecurities.Russell2000 measurestheperformanceofthesmallcapsegmentoftheUSequityuniverse.Russell2000isasubsetoftheRussell3000indexrepresentingapproximately10%ofthetotalmarketcapitalizationofthatindex.S&PGSCI isacompositeindexofcommoditysectorreturnrepresentinganunleveraged,longonlyinvestmentincommodityfuturesthatisbroadlydiversifiedacrossthespectrumofcommodities.S&PGSCIAgriculture isacompositeindexofagriculturecommodityfuturesunleveraged,longonlyinvestment.BarclaysCapitalUS30YearTIPSIndex .BarclaysCapital30yearTIPSontherunindexquotedinUSDollarstradedintradayCitigroupEconomicSurpriseIndex .TheCitigroupEconomicSurpriseIndicesareobjectiveandquantitativemeasuresofeconomicnews.Theyaredefinedasweightedhistoricalstandarddeviationsofdatasurprises(actualreleasesvsBloombergsurveymedian).Apositivereadingof theEconomicSurpriseIndexsuggeststhateconomicreleaseshaveonbalancebeatingconsensus.Theindicesarecalculateddailyinarollingthreemonthwindow.TheweightsofeconomicindicatorsarederivedfromrelativehighfrequencyspotFXimpactsof1standarddeviationdatasurprises.Theindicesalsoemployatimedecayfunctiontoreplicatethelimitedmemoryofmarkets.DAX ThisindexistheGermanStockIndexisatotalreturnindexof30selectedGermanbluechipstockstradedontheFrankfurtStockExchange.CAC40 ThisindexthemostwidelyusedindicatoroftheParismarket,reflectstheperformanceofthe40largestequitieslistedinFrance,measuredbyfreefloatmarketcapitalizationandliquidity.FTSE100 Isacapitalizationweightedindexofthe100mosthighlycapitalizedcompaniestradedontheLondonStockExchange.MexicoIPC TheMexicanIPCindexisacapitalizationweightedindexoftheleadingstockstradedontheMexicanStockExchange.HangSeng TheHangSengChinaEnterprisesIndexisafreefloatcapitalizationweightedindexcomprisedofHshareslistedontheHongKong StockExchangeandincludedintheHangSengMainlandCompositeIndex.KOSPI ThisindexisacapitalizedweightedindexofallcommonsharesontheKoreanStockExchanges.Nikkei225 TheNikkei225Stockaverageisapriceweightedaverageof225topratedJapanesecompanieslistedintheFirstSectionofthe TokyoStockExchange.AustraliaAORD S&P/ASXAllOrdinariesrepresents500largestcompaniesintheAustralianequitiesmarket.IndexconstitutesaredrawnfromeligiblecompanieslistedontheAustralianStockExchange.BrazilBovespaIndex(IBOV)TheBovespaIndexisagrossreturnindexweightedbytradedvolumeandiscomprisedofthemostliquidstockstradedontheSaoPauloStockExchange.TheBovespaIndexhasbeendivided10timesbyafactorof10sinceJanuary1,1985.ShanghaiIndex(SHCOMP)TheShanghaiStockExchangeCompositeIndexisacapitalizationweightedindex.TheindextracksthedailyperformanceofallAsharesandBshareslistedontheShanghaiStockExchange.TheindexwasdevelopedonDecember19,1990withabasevalueof100.BSEIndiaSensitiveIndex(Sensex)TheSensexisacapweightedindex.Theselectionoftheindexmembershasbeenmadeonthebasisofliquidity,depthandfloatingstockadjustmentdepthandindustryrepresentation.S&PLSTALevLoanIndex(BankLoans) CreatedbytheLeveragedCommentary&Data(LCD)teamatS&PCapitalIQ,thereviewprovides an overviewandoutlookoftheleveragedloanmarketaswellasanexpansivereviewoftheS&PLeveragedLoanIndexandsubindexes. Thereviewconsistsofindexgeneralcharacteristics,results,riskreturnprofile,default/distressstatistics, andrepaymentanalysis.Itisnotpossibletoinvestdirectlyinanindex.Citigroup3MonthTBill(SBMMTB3) 3MonthUSTBillinUSdollars.

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DisclaimerImportantInformationRegardingThisReportIssueselectionprocessesandtoolsillustratedthroughoutthispresentationaresamplesandmaybemodifiedperiodically.Suchchartsarenottheonlytoolsusedbytheinvestmentteams,areextremelysophisticated,maynotalwaysproducetheintendedresultsandarenotintendedforusebynonprofessionals.DoubleLinehasnoobligationtoproviderevisedassessmentsintheeventofchangedcircumstances.Whilewehavegatheredthisinformationfromsourcesbelievedtobereliable,DoubleLinecannotguaranteetheaccuracyoftheinformationprovided.Securitiesdiscussedarenotrecommendationsandarepresentedasexamplesofissueselectionorportfoliomanagementprocesses.Theyhavebeenpickedforcomparisonorillustrationpurposesonly.Nosecuritypresentedwithiniseitherofferedforsaleorpurchase.DoubleLinereservestherighttochangeitsinvestmentperspectiveandoutlook withoutnoticeasmarketconditionsdictateorasadditionalinformationbecomesavailable.ImportantInformationRegardingRiskFactorsInvestmentstrategiesmaynotachievethedesiredresultsduetoimplementationlag,othertimingfactors,portfoliomanagementdecisionmaking,economicormarketconditionsorotherunanticipatedfactors.Theviewsandforecastsexpressedinthismaterialareasofthedateindicated,aresubjecttochangewithoutnotice,maynotcometopassanddonotrepresentarecommendationorofferofanyparticularsecurity,strategy,orinvestment. Pastperformanceisnoguaranteeoffutureresults.ImportantInformationRegardingDoubleLineInpreparingtheclientreports(andinmanagingtheportfolios),DoubleLineanditsvendorspriceseparateaccountportfolio securitiesusingvarioussources,includingindependentpricingservicesandfairvalueprocessessuchasbenchmarking.ToreceiveacomplimentarycopyofDoubleLinescurrentFormADVPartII(whichcontainsimportantadditionaldisclosureinformation),acopyoftheDoubleLinesproxyvotingpoliciesandprocedures,ortoobtainadditionalinformationonDoubleLinesproxyvotingdecisions,pleasecontact DoubleLinesClientServices.ImportantInformationRegardingDoubleLinesInvestmentStyleDoubleLineseekstomaximizeinvestmentresultsconsistentwithourinterpretationofclientguidelinesandinvestmentmandate.WhileDoubleLineseekstomaximizereturnsforourclientsconsistentwithguidelines,DoubleLinecannotguaranteethatDoubleLinewilloutperformaclient'sspecifiedbenchmark.Additionally,thenatureofportfoliodiversificationimpliesthatcertainholdingsandsectorsinaclient'sportfoliomayberisinginpricewhileothersarefalling;or,thatsomeissuesandsectorsareoutperformingwhileothersareunderperforming.Suchoutorunderperformancecanbetheresultofmanyfactors,suchasbutnotlimitedtoduration/interestrateexposure,yieldcurveexposure,bondsectorexposure,ornewsorrumorsspecifictoasinglename.DoubleLineisanactivemanagerandwilladjustthecompositionofclientsportfoliosconsistentwithourinvestmentteamsjudgmentconcerningmarketconditionsandanyparticularsecurity.TheconstructionofDoubleLineportfoliosmaydiffersubstantiallyfromtheconstruction ofanyofavarietyofbondmarketindices.Assuch,aDoubleLineportfoliohasthepotentialtounderperformoroutperformabondmarketindex.Sincemarketscanremaininefficientlypricedforlongperiods,DoubleLinesperformanceisproperlyassessedoverafullmultiyearmarketcycle.

AsofDecember31,2013theDoubleLineTotalReturnBondFundheld23.78%inFannieMae(FNMA),6.60%inFreddieMac(FHLMC)and 0.00%inGinnieMae(GNMA).AsofDecember31,2013theDoubleLineCoreFixedIncomeFundheld1.49%inFannieMae(FNMA),1.20%inFreddieMac(FHLMC)and0.11%inGinnieMae(GNMA).Fundholdingsandsectorallocationsaresubjecttochangeandarenotrecommendationstobuyorsellanysecurity.

ReferencestootherFundsshouldnotbeinterpretedasanofferofthosesecurities.Diversification doesnotassureaprofitorprotectagainstalossinadecliningmarket.Opinionsexpressedaresubjecttochangeatanytime,arenotaguaranteeandshouldnotbeconsideredinvestmentadvice.

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Gundlach Presentation: Penny For Your Thoughts [SLIDES]

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