Correspondence 0001193125-24-254080 from DoubleLine ETF Trust (CIK 0001886172)
DoubleLine ETF Trust (CIK 0001886172)
Date: Nov. 8, 2024 · CIK: 0001886172 · Accession: 0001193125-24-254080
AI Filing Summary & Sentiment
File numbers found in text: 333-260030, 811-23746
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Attn: Ms. Kimberly Browning Re: DoubleLine ETF Trust (the “Registrant”) with respect to DoubleLine Multi-Sector Income ETF (the “Fund”), File Nos. 333-260030 and 811-23746
Dear Ms. Browning:
This letter is being filed to respond to the telephonic comments received from you on October 17, 2024, regarding the Staff of the Securities and Exchange Commission’s (the “Staff”) review of Post-Effective Amendment No. 9 to the Registrant’s registration statement on Form N-1A (the “Registration Statement”) filed with the Securities and Exchange Commission on September 6, 2024. The Staff’s comments are summarized herein to the best of our understanding, followed by the Registrant’s responses. The Registrant’s responses will be reflected, to the extent applicable, in Post-Effective Amendment No. 10 to the Registration Statement, which the Registrant expects to be filed on or about November 19, 2024. Capitalized terms not defined in this letter have the meanings assigned to them in the Registration Statement.
* * * * * *
Prospectus
Prospectus Summary—Investment Objectives
1. Comment: If the Fund will provide shareholders with prior notice regarding a change to the Fund’s investment objectives, please provide disclosure in the appropriate place and include the amount of advance notice that will be given.
Response: The Registrant notes that Form N-1A requires disclosure of whether a fund’s investment objective may be changed without shareholder approval but does not require disclosure of a notice requirement or notice period. Accordingly, the Registrant notes that the following disclosure appears under “Additional Information About Principal Investment Strategies and Principal Risks—Investment Objectives”: “The Fund’s investment objectives described in the Fund Summary section are non-fundamental, which means the Fund may change its investment objectives without shareholder approval or prior notice.”
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November 8, 2024
Prospectus Summary—Fee Table
2. Regarding the Fee Table,
a. Comment: Please provide the Staff with a completed fee table and expense example.
Response: Please see Appendix A attached hereto.
b. Comment: The Staff notes the second sentence in the preamble to the Fee Table is neither permitted nor required by Form N-1A and should be removed. The Staff would not object to a footnote explanation by the management fee line item and more fulsome disclosure of the unitary fee structure in Item 10. Please ensure that the Item 10 disclosure is a detailed discussion of what the unitary fee includes in totality.
Response: The Registrant will remove the above-mentioned sentence from the preamble to the Fee Table (see Appendix A attached hereto). The Registrant will also ensure that the Item 10 disclosure reflects a discussion of the Fund’s advisory fee structure.
c. Comment: The Staff notes that there is no acquired fund fees and expenses (“AFFE”) line item in the fee table. The Fund’s Item 4 disclosure indicates the Fund may invest in other funds. To the extent the Fund has estimated AFFE, please confirm that the estimate of AFFE does not exceed 1 basis point of the Fund’s average net assets and is included in the Fee Table under “Other Expenses.” If, however, the estimated AFFE exceeds 1 basis point of the Fund’s average net assets, please include a separate sub-caption line item for such expenses in the fee table. See Form N-1A, Item 3, Instructions 3(f)(i) and (3(f)(iv).
Response: Although the Fund reserves the ability to invest in other registered investment companies, from time to time, the Registrant confirms that it has considered whether an AFFE line item is required based on the Fund’s estimated acquired fund fees and expenses for the first year of operations and determined that this line item is not required.
d. Comment: The Staff notes that Item 4 discusses the Fund’s use of short sales as part of the Fund’s principal investment strategies. Please confirm to the Staff that the estimate of “Other Expenses” in the Fee Table includes the estimated costs of engaging in short sales (dividend expenses). Alternatively, if the Fund will engage materially in short sales, the Fund may add estimated costs of engaging in short sales as a sub-caption under “Other Expenses.”
Response: The Registrant confirms that the Fund’s estimated costs of engaging in short sales, if any, will be reflected in “Other Expenses” as required by Form N-1A.
e. Comment: The Staff notes that the disclosure regarding the Fund’s investment advisory agreement in the preamble to the Fee Table does not align with the disclosure on page 51 of the Prospectus. Please revise the disclosure on page 51 as necessary.
Response: The Registrant will make the requested revisions.
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November 8, 2024
Prospectus Summary—Principal Investment Strategies
3. Comment: Please note that Item 4(a)(1) of Form N-1A requires the Registrant to identify the Fund’s principal investment strategy, including the types of securities in which the Fund will principally invest. The Staff notes that the Fund’s Item 4 disclosure includes several phrases indicating or suggesting that the Fund has not summarized its principal investment strategies in full. For example, these phrases include “for example,” “may invest,” “expects to invest,” and “may include, among other factors.” The Staff respectfully requests that the Registrant delete these phrases and confirm that the Fund fully describes its principal investment strategies and the securities it will principally invest in.
Response: The Registrant confirms that all principal investment strategies will be described in accordance with the requirements of Form N-1A. With respect to disclosing the types of investments the Fund may invest in, the Registrant respectfully declines to remove uses of the phrase “for example” and similar phrases in the Registration Statement. As the Fund will be allocating and re-allocating its assets across various sectors within the fixed income markets, the Registrant believes that the use of such phrases provides the Fund’s shareholders with notice regarding the universe of income-producing instruments in which the Fund may invest from time to time and potential allocation to such instruments, which may change over time. Additionally, as discussed in the Prospectus, the Fund’s portfolio managers are adopting a controlled risk approach to managing the Fund’s portfolio, which involves evaluating various factors that may change over time in order to attempt to control the principal risk components of the fixed income markets.
4. Comment: The second sentence in the first paragraph under “Principal Investment Strategies” uses the phrase “fixed income universe.” Please clarify what is meant by “fixed income universe.”
Response: The Registrant will revise the above-mentioned disclosure as follows:
The Fund seeks to achieve its investment objectives by active asset allocation among various market sectors within the fixed income universe markets and security selection within the selected market sectors.
5. Comment: The third sentence in the first paragraph under “Principal Investment Strategies” mentions “investment grade corporate debt securities.” Based on the Fund’s Item 4 disclosure, the Fund does not appear to have any restrictions with respect to credit quality ratings, including no restrictions with respect to instruments rated as “junk bonds” or those that the Adviser appears to be of comparable quality. The Staff believes that this disclosure highlighting a focus on “investment grade” may be confusing and possibly misleading in light of the Fund’s lack of restrictions on credit quality ratings. Please delete the reference to “investment grade.”
Response: See responses to Comment 3 and Comment 9.b. The Registrant respectfully notes the cited disclosure references “high yield corporate debt securities” immediately after “investment grade corporate debt securities” among other sectors, and that these are among the sectors of the fixed income markets among which the Fund will allocate and re-allocate its assets.
6. Comment: Please harmonize the Fund’s disclosure regarding investments in CLOs and CDOs in the Registration Statement.
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November 8, 2024
Response: The Registrant agrees to review the Fund’s disclosures and revise applicable disclosure in the Registration Statement as necessary.
7. Comment: The Staff notes the SAI appears to discuss principal investment strategies and risks. To the extent the Fund has principal investment strategies and risks disclosed in the SAI, please confirm that they are either disclosed in Item 4 and 9 or revise accordingly.
Response: The Registrant so confirms.
8. Comment: To the extent that the Fund invests in below investment grade CDOs, CMOs, non-agency MBS, non-agency ABS, non-traded closed-end funds, non-traded REITs, non-traded BDCs, unrated or distressed debt securities, litigation financing securities, and distressed and defaulted securities, please disclose the upper limit on the Fund’s investments in below investment grade for these instruments. If the Fund has no upper limit, please confirm to the Staff how much of the Fund’s assets are expected to be invested in each of the above instruments. Based on the Registrant’s response, the Staff may have additional comments.
Response: The Registrant respectfully notes that the fourth paragraph under “Principal Investment Strategies” discloses that the Fund may invest without limit in securities rated below investment grade or in unrated securities judged by the Adviser to be of comparable quality and declines to make changes in response to this comment.
9. The fifth paragraph under “Principal Investment Strategies” refers to “Corporate bonds and certain other fixed income instruments rated below investment grade . . .”
a. Comment: Please clarify in plain English what the “certain other fixed income instruments” refers to.
Response: The Registrant will revise the above-mentioned disclosure as follows:
. . . certain any other fixed income instrument.
b. Comment: Please revise this disclosure to make it clear that the Fund may invest in junk bonds without limitation, or otherwise make clear the Fund’s policy with respect to investing in junk bonds or below investment grade bonds.
Response: The Registrant respectfully notes that the fourth paragraph under “Principal Investment Strategies” discloses that the Fund may invest without limit in securities rated below investment grade and declines to make changes in response to this comment.
10. Regarding the seventh paragraph under “Principal Investment Strategies,” the Staff notes that the Fund appears to be able to invest principally without limitation in both foreign and domestic issuers and without limitations with respect to the types of fixed-income securities and equity securities issued by foreign and domestic issuers.
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November 8, 2024
a. Comment: The Staff notes the reference to “foreign securities (corporate and government, including foreign hybrid securities).” Please indicate the types of foreign instruments the Fund will invest and any related limitations. Please also define “foreign hybrid security” (no objection to adding such definition in Item 9) and include attendant risks.
Response: See response to Comment 3. The Registrant will separately add the following definition for foreign hybrid securities to Item 9:
. . . foreign securities (corporate and government, including foreign hybrid securities (i.e., foreign securities that have a combination of debt and equity characteristics))
b. Comment: Please disclose how the Fund defines the term “foreign issuer” (no objection to adding such definition in Item 9).
Response: The Registrant will add the following disclosure to Item 9:
A foreign issuer is any issuer which is a foreign government, a national of any foreign government or a corporation or other organization incorporated or organized under the laws of any foreign country.
c. Comment: Please add disclosure to Item 4 indicating that the Fund may invest in securities denominated in both U.S. dollars and foreign currencies.
Response: The Registrant confirms that the Fund intends to invest as a matter of its principal investment strategies in securities denominated only in U.S. dollars and will remove references to foreign currencies from its Item 4 and 9 disclosures.
11. Regarding the seventh paragraph under “Principal Investment Strategies,”
a. Comment: Please clarify in plain English what “other fixed income and income producing instruments” includes.
Response: See response to Comment 3.
b. Comment: Please define “private sector entities.”
Response: The Registrant will revise the below disclosure in Item 4 and Item 9 as follows:
Income-producing instruments include but are not limited to bonds, debt securities and other fixed income and income-producing instruments of any kind issued or guaranteed by governmental or non-governmental (including private sector issuers) private sector entities.
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November 8, 2024
c. Comment: Please define “cash and cash equivalents” and how they differ from the instruments included in clause (xvi). With respect to the Fund’s investments in cash, please disclose how the Fund will achieve its investment objectives by investing in cash and cash equivalents.
Response: The Registrant will revise the above-mentioned disclosure as follows:
(xv) custodial receipts, and cash and cash equivalents; (xvi) short-term, high quality investments, including, for example, commercial paper, bankers’ acceptances, certificates of deposit, bank time deposits, repurchase agreements, and investments in money market mutual funds or similar pooled investments;
See also the response to Comment 3.
d. Comment: In clause (xvi), please clarify the reference to “similar pooled investments.”
Response: The Registrant will revise the above-mentioned disclosure as follows in Item 9:
. . . (xvi) short-term, high quality investments, including, for example, commercial paper, bankers’ acceptances, certificates of deposit, bank time deposits, repurchase agreements, and investments in money market mutual funds or similar pooled investments (e.g., pooled short term cash management vehicles that do not operate as money market funds);
12. The first sentence of the eighth paragraph under “Principal Investment Strategies” states: “The Fund may enter into derivatives transactions and other instruments of any kind for hedging purposes or otherwise to gain, or reduce, long or short exposure to one or more asset classes or issuers.”
a. Comment: Please specify what “other instruments” the Fund may invest in and add appropriate risk disclosure.
Response: The Registrant will revise the above-mentioned disclosure as follows:
The Fund may enter into derivatives transactions and other instruments of any kind for hedging or speculative purposes or otherwise to gain, or reduce, long or short exposure to one or more asset classes or issuers.
b. Comment: Please also confirm whether “or otherwise” means that the Fund may invest in derivatives for speculative purposes. If so, please state that in plain English and include attendant risk disclosure.
Response: See above response.
13. Comment: Please specify what derivatives will be used for the Fund’s 80% basket. Please note that disclosure for any principal investment related to derivatives should be tailored specifically to how a fund expects to be managed and should address those strategies that the fund expects to be the most
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CORRESP 1 filename1.htm CORRESP ROPES & GRAY LLP 1211 AVENUE OF THE AMERICAS NEW YORK, NY 10036-8704 WWW.ROPESGRAY.COM November 8, 2024 Nicholas M. Coppola T +1 212 596 9490 nicholas.coppola@ropesgray.com VIA EDGAR Division of Investment Management Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Attn: Ms. Kimberly Browning Re: DoubleLine ETF Trust (the “Registrant”) with respect to DoubleLine Multi-Sector Income ETF (the “Fund”), File Nos. 333-260030 and 811-23746 Dear Ms. Browning: This letter is being filed to respond to the telephonic comments received from you on October 17, 2024, regarding the Staff of the Securities and Exchange Commission’s (the “Staff”) review of Post-Effective Amendment No. 9 to the Registrant’s registration statement on Form N-1A (the “Registration Statement”) filed with the Securities and Exchange Commission on September 6, 2024. The Staff’s comments are summarized herein to the best of our understanding, followed by the Registrant’s responses. The Registrant’s responses will be reflected, to the extent applicable, in Post-Effective Amendment No. 10 to the Registration Statement, which the Registrant expects to be filed on or about November 19, 2024. Capitalized terms not defined in this letter have the meanings assigned to them in the Registration Statement. * * * * * * Prospectus Prospectus Summary—Investment Objectives 1. Comment: If the Fund will provide shareholders with prior notice regarding a change to the Fund’s investment objectives, please provide disclosure in the appropriate place and include the amount of advance notice that will be given. Response: The Registrant notes that Form N-1A requires disclosure of whether a fund’s investment objective may be changed without shareholder approval but does not require disclosure of a notice requirement or notice period. Accordingly, the Registrant notes that the following disclosure appears under “Additional Information About Principal Investment Strategies and Principal Risks—Investment Objectives”: “The Fund’s investment objectives described in the Fund Summary section are non-fundamental, which means the Fund may change its investment objectives without shareholder approval or prior notice.” - 2 - November 8, 2024 Prospectus Summary—Fee Table 2. Regarding the Fee Table, a. Comment: Please provide the Staff with a completed fee table and expense example. Response: Please see Appendix A attached hereto. b. Comment: The Staff notes the second sentence in the preamble to the Fee Table is neither permitted nor required by Form N-1A and should be removed. The Staff would not object to a footnote explanation by the management fee line item and more fulsome disclosure of the unitary fee structure in Item 10. Please ensure that the Item 10 disclosure is a detailed discussion of what the unitary fee includes in totality. Response: The Registrant will remove the above-mentioned sentence from the preamble to the Fee Table (see Appendix A attached hereto). The Registrant will also ensure that the Item 10 disclosure reflects a discussion of the Fund’s advisory fee structure. c. Comment: The Staff notes that there is no acquired fund fees and expenses (“AFFE”) line item in the fee table. The Fund’s Item 4 disclosure indicates the Fund may invest in other funds. To the extent the Fund has estimated AFFE, please confirm that the estimate of AFFE does not exceed 1 basis point of the Fund’s average net assets and is included in the Fee Table under “Other Expenses.” If, however, the estimated AFFE exceeds 1 basis point of the Fund’s average net assets, please include a separate sub-caption line item for such expenses in the fee table. See Form N-1A, Item 3, Instructions 3(f)(i) and (3(f)(iv). Response: Although the Fund reserves the ability to invest in other registered investment companies, from time to time, the Registrant confirms that it has considered whether an AFFE line item is required based on the Fund’s estimated acquired fund fees and expenses for the first year of operations and determined that this line item is not required. d. Comment: The Staff notes that Item 4 discusses the Fund’s use of short sales as part of the Fund’s principal investment strategies. Please confirm to the Staff that the estimate of “Other Expenses” in the Fee Table includes the estimated costs of engaging in short sales (dividend expenses). Alternatively, if the Fund will engage materially in short sales, the Fund may add estimated costs of engaging in short sales as a sub-caption under “Other Expenses.” Response: The Registrant confirms that the Fund’s estimated costs of engaging in short sales, if any, will be reflected in “Other Expenses” as required by Form N-1A. e. Comment: The Staff notes that the disclosure regarding the Fund’s investment advisory agreement in the preamble to the Fee Table does not align with the disclosure on page 51 of the Prospectus. Please revise the disclosure on page 51 as necessary. Response: The Registrant will make the requested revisions. - 3 - November 8, 2024 Prospectus Summary—Principal Investment Strategies 3. Comment: Please note that Item 4(a)(1) of Form N-1A requires the Registrant to identify the Fund’s principal investment strategy, including the types of securities in which the Fund will principally invest. The Staff notes that the Fund’s Item 4 disclosure includes several phrases indicating or suggesting that the Fund has not summarized its principal investment strategies in full. For example, these phrases include “for example,” “may invest,” “expects to invest,” and “may include, among other factors.” The Staff respectfully requests that the Registrant delete these phrases and confirm that the Fund fully describes its principal investment strategies and the securities it will principally invest in. Response: The Registrant confirms that all principal investment strategies will be described in accordance with the requirements of Form N-1A. With respect to disclosing the types of investments the Fund may invest in, the Registrant respectfully declines to remove uses of the phrase “for example” and similar phrases in the Registration Statement. As the Fund will be allocating and re-allocating its assets across various sectors within the fixed income markets, the Registrant believes that the use of such phrases provides the Fund’s shareholders with notice regarding the universe of income-producing instruments in which the Fund may invest from time to time and potential allocation to such instruments, which may change over time. Additionally, as discussed in the Prospectus, the Fund’s portfolio managers are adopting a controlled risk approach to managing the Fund’s portfolio, which involves evaluating various factors that may change over time in order to attempt to control the principal risk components of the fixed income markets. 4. Comment: The second sentence in the first paragraph under “Principal Investment Strategies” uses the phrase “fixed income universe.” Please clarify what is meant by “fixed income universe.” Response: The Registrant will revise the above-mentioned disclosure as follows: The Fund seeks to achieve its investment objectives by active asset allocation among various market sectors within the fixed income universe markets and security selection within the selected market sectors. 5. Comment: The third sentence in the first paragraph under “Principal Investment Strategies” mentions “investment grade corporate debt securities.” Based on the Fund’s Item 4 disclosure, the Fund does not appear to have any restrictions with respect to credit quality ratings, including no restrictions with respect to instruments rated as “junk bonds” or those that the Adviser appears to be of comparable quality. The Staff believes that this disclosure highlighting a focus on “investment grade” may be confusing and possibly misleading in light of the Fund’s lack of restrictions on credit quality ratings. Please delete the reference to “investment grade.” Response: See responses to Comment 3 and Comment 9.b. The Registrant respectfully notes the cited disclosure references “high yield corporate debt securities” immediately after “investment grade corporate debt securities” among other sectors, and that these are among the sectors of the fixed income markets among which the Fund will allocate and re-allocate its assets. 6. Comment: Please harmonize the Fund’s disclosure regarding investments in CLOs and CDOs in the Registration Statement. - 4 - November 8, 2024 Response: The Registrant agrees to review the Fund’s disclosures and revise applicable disclosure in the Registration Statement as necessary. 7. Comment: The Staff notes the SAI appears to discuss principal investment strategies and risks. To the extent the Fund has principal investment strategies and risks disclosed in the SAI, please confirm that they are either disclosed in Item 4 and 9 or revise accordingly. Response: The Registrant so confirms. 8. Comment: To the extent that the Fund invests in below investment grade CDOs, CMOs, non-agency MBS, non-agency ABS, non-traded closed-end funds, non-traded REITs, non-traded BDCs, unrated or distressed debt securities, litigation financing securities, and distressed and defaulted securities, please disclose the upper limit on the Fund’s investments in below investment grade for these instruments. If the Fund has no upper limit, please confirm to the Staff how much of the Fund’s assets are expected to be invested in each of the above instruments. Based on the Registrant’s response, the Staff may have additional comments. Response: The Registrant respectfully notes that the fourth paragraph under “Principal Investment Strategies” discloses that the Fund may invest without limit in securities rated below investment grade or in unrated securities judged by the Adviser to be of comparable quality and declines to make changes in response to this comment. 9. The fifth paragraph under “Principal Investment Strategies” refers to “Corporate bonds and certain other fixed income instruments rated below investment grade . . .” a. Comment: Please clarify in plain English what the “certain other fixed income instruments” refers to. Response: The Registrant will revise the above-mentioned disclosure as follows: . . . certain any other fixed income instrument. b. Comment: Please revise this disclosure to make it clear that the Fund may invest in junk bonds without limitation, or otherwise make clear the Fund’s policy with respect to investing in junk bonds or below investment grade bonds. Response: The Registrant respectfully notes that the fourth paragraph under “Principal Investment Strategies” discloses that the Fund may invest without limit in securities rated below investment grade and declines to make changes in response to this comment. 10. Regarding the seventh paragraph under “Principal Investment Strategies,” the Staff notes that the Fund appears to be able to invest principally without limitation in both foreign and domestic issuers and without limitations with respect to the types of fixed-income securities and equity securities issued by foreign and domestic issuers. - 5 - November 8, 2024 a. Comment: The Staff notes the reference to “foreign securities (corporate and government, including foreign hybrid securities).” Please indicate the types of foreign instruments the Fund will invest and any related limitations. Please also define “foreign hybrid security” (no objection to adding such definition in Item 9) and include attendant risks. Response: See response to Comment 3. The Registrant will separately add the following definition for foreign hybrid securities to Item 9: . . . foreign securities (corporate and government, including foreign hybrid securities (i.e., foreign securities that have a combination of debt and equity characteristics)) b. Comment: Please disclose how the Fund defines the term “foreign issuer” (no objection to adding such definition in Item 9). Response: The Registrant will add the following disclosure to Item 9: A foreign issuer is any issuer which is a foreign government, a national of any foreign government or a corporation or other organization incorporated or organized under the laws of any foreign country. c. Comment: Please add disclosure to Item 4 indicating that the Fund may invest in securities denominated in both U.S. dollars and foreign currencies. Response: The Registrant confirms that the Fund intends to invest as a matter of its principal investment strategies in securities denominated only in U.S. dollars and will remove references to foreign currencies from its Item 4 and 9 disclosures. 11. Regarding the seventh paragraph under “Principal Investment Strategies,” a. Comment: Please clarify in plain English what “other fixed income and income producing instruments” includes. Response: See response to Comment 3. b. Comment: Please define “private sector entities.” Response: The Registrant will revise the below disclosure in Item 4 and Item 9 as follows: Income-producing instruments include but are not limited to bonds, debt securities and other fixed income and income-producing instruments of any kind issued or guaranteed by governmental or non-governmental (including private sector issuers) private sector entities. - 6 - November 8, 2024 c. Comment: Please define “cash and cash equivalents” and how they differ from the instruments included in clause (xvi). With respect to the Fund’s investments in cash, please disclose how the Fund will achieve its investment objectives by investing in cash and cash equivalents. Response: The Registrant will revise the above-mentioned disclosure as follows: (xv) custodial receipts, and cash and cash equivalents; (xvi) short-term, high quality investments, including, for example, commercial paper, bankers’ acceptances, certificates of deposit, bank time deposits, repurchase agreements, and investments in money market mutual funds or similar pooled investments; See also the response to Comment 3. d. Comment: In clause (xvi), please clarify the reference to “similar pooled investments.” Response: The Registrant will revise the above-mentioned disclosure as follows in Item 9: . . . (xvi) short-term, high quality investments, including, for example, commercial paper, bankers’ acceptances, certificates of deposit, bank time deposits, repurchase agreements, and investments in money market mutual funds or similar pooled investments (e.g., pooled short term cash management vehicles that do not operate as money market funds); 12. The first sentence of the eighth paragraph under “Principal Investment Strategies” states: “The Fund may enter into derivatives transactions and other instruments of any kind for hedging purposes or otherwise to gain, or reduce, long or short exposure to one or more asset classes or issuers.” a. Comment: Please specify what “other instruments” the Fund may invest in and add appropriate risk disclosure. Response: The Registrant will revise the above-mentioned disclosure as follows: The Fund may enter into derivatives transactions and other instruments of any kind for hedging or speculative purposes or otherwise to gain, or reduce, long or short exposure to one or more asset classes or issuers. b. Comment: Please also confirm whether “or otherwise” means that the Fund may invest in derivatives for speculative purposes. If so, please state that in plain English and include attendant risk disclosure. Response: See above response. 13. Comment: Please specify what derivatives will be used for the Fund’s 80% basket. Please note that disclosure for any principal investment related to derivatives should be tailored specifically to how a fund expects to be managed and should address those strategies that the fund expects to be the most