AdvisorShares is planning another actively managed exchange traded fund that focuses on an income-generating strategy.
A recent filing from the provider highlighted the Newfleet Multi-Sector Income ETF (NYSEArca:MINC) which will employ a multi-faceted approach in order to zero in on undervalued areas of the fixed income world. Eric Dutram for Zacks reports that the 0.75% expense ratio is comparatively high for other active ETFs in this sector, but the performance is anticipated to outdo other subsequent funds within the bond space.
PIMCO Total Return ETF (BOND) has been trading about 6 months now and has returned around 8.4% already. The stellar performance right out of the gates has opened up the field for more actively managed ETFs, specifically those focused in on the bond space. The ETF has about $2.5 billion in assets. [New ETF Pairs High Yield with Active Management]
The average duration of the bonds featured in MINC will be short, on average about 1-3 years. Default risk is not high and only 20% of assets will be allocated to bonds that are rated below investment grade. [List of Diversified Bond ETFs]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.