This article was originally published on ETFTrends.com.
Legg Mason and its affiliate, Western Asset Management Company, launched a new actively managed short-duration income exchange traded fund to help investors hone in on attractive yields and better manage risk exposure.
The active ETF will be managed by S. Kenneth Leech, Chief Investment Officer; Michael C. Buchanan, Deputy Chief Investment Officer; Ryan K. Brist, Head of Global Investment Grade Credit and Portfolio Manager; Blanton Y. Keh, Portfolio Manager; and Kurt D. Halvorson, Portfolio Manager.
"With WINC we can actively manage duration, sector and security selection – providing greater flexibility to respond to dynamic market conditions," Buchanan said in a note. "The fund's exposures are 100% U.S.-dollar denominated. They can expand beyond investment-grade corporate bonds to include high-yield bonds, structured securities, emerging market debt and other sectors and securities."
"This flexibility can allow for enhanced performance, added diversification and improved yield potential," he added.
The Western Asset Short Duration Income ETF tries to generate current income by investing in investment-grade fixed income securities, according to the fund prospectus.
Specifically, the fund may hold corporate debt securities, including notes, bonds, debentures and commercial paper, are fixed income securities usually issued by businesses to finance their operations. The securities may be secured or unsecured, may be issued by U.S. or foreign entities and may carry variable or floating rates of interest. The fund may invest in Rule 144A securities. The fund may also invest in other short-duration fixed-income securities. Additionally, the ETF may include up to 15% of its assets in mortgage-backed securities and asset-backed securities.
WINC will try to maintain an effective duration of three years or less. The ETF's performance is reference benchmarked against the Bloomberg Barclays 1-5 Year Corporate Bond Total Return Index.
The fund will follow an "all-weather" approach to income generation to target higher-quality income opportunities. The fund's go anywhere methodology will allow it to have the ability to look beyond core holdings and expand the opportunity set to potentially provide attractive income throughout different market cycles.
"We are pleased to add this exciting new actively managed income-seeking fund, offered in a cost-effective, investor-friendly ETF wrapper," Buchanan said. "WINC targets short-duration credit exposure while leveraging Western Asset's global investment capabilities and strong risk management program, employing an active process that is both top-down and bottom-up to help identify attractive credit and income opportunities while actively managing risk. While always opportunistic, we are dedicated to providing investors with a long-term fundamental value discipline."
For more information on new fund products, visit our new ETFs category.
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