New FlexShares ETF Offers Yield and Risk Management

ETF Trends

FlexShares is answering investors constant search for yield with new exchange traded funds. The latest is the FlexShares Ready Access Variable Income ETF (RAVI) which offers a comfortable and consistent yield.

Northern Trust’s latest FlexShares ETF business is doing a great job at satisfying investors constant need for yield. The funds are good at mitigating risk and maintaining liquidity, reports Dan Burrows for InvestorPlace. [Will ETFs Replace Money Market Funds?]

RAVI is an actively managed ETF that answers a call or those investors that prefer the money market. RAVI holds investment-grade debt securities from around the world — everything from Treasurys to corporate bonds to munis to mortgage securities — but with short durations, reports Burrows. About 65% of the portfolio is held in fixed-income tools from the U.S. and abroad. [Active ETF Sector is Gaining Traction]

RAVI caters to low volatility and liquidity by staying at the low end of the yield curve. The short term debt is not expected to go over 2 years. Ultimately, the goal is to help cash investors maintain liquidity and reach for higher returns, without undue volatility, FlexShares says. [Why Investors are Dumping Money Market Funds for Short-Duration ETFs]

The 0.25% expense ratio is very competitive against the active management landscape.

“We can’t come out and swing for the fences,” Shundrawn Thomas, head of ETFs at Northern Trust, said. “Investors are looking for the right mix of income and liquidity,” he adds on RAVI, which is actively managed by three short-duration fixed income managers at Northern Trust Investments.

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.

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