2013 is turning out to be a year of innovation for the ETF industry, bringing the total number of funds just over 1,500. While investors are looking for portfolios with unique strategies, there has also been a rising trend of ‘getting back to basics’ for issuers, as many have looked to round out lineups and plug any weak spots.
While there has been a number of new fund launches this year that offer innovative strategies in exchange-traded form, at this time ALPS, which includes 2 dividend dogs fund (SDOG) & (IDOG) has recently added an income fund to its ETF lineup, the RiverFront Strategic Income Fund (RIGS).
RIGS, an actively managed fund, has its foundation based on the principles of the RiverFront Strategic Income Group, which is guided by an investment philosophy that embraces the dynamic nature of the complex global markets through which it navigates daily.
The product seeks total return, while putting an emphasis on income by investing in a global portfolio of fixed income securities of various maturities, ratings and currency denominations (Read: ALPS Launches New Income ETF).
The Fund intends to utilize various investment strategies in a broad array of fixed income sectors. It may invest in debt instruments which also include convertible bonds and preferred stocks. The product will also invest in high yield bonds as well as in mortgage backed securities (MBS).
While the average maturity of the fund’s portfolio of fixed income securities will vary based on the Sub-Adviser’s (RiverFront Strategic Income Group) assessment of economic and market conditions, as well as current and anticipated changes in interest rates, the Sub-Adviser intends to manage the fund’s portfolio so that it has an average duration of between two andten years, under normal circumstances.
The product charges investors 22bps in fees annually.
What’s in it for investors?
The strategy which may attract investors is that RIGS aims to generate income by investing in both corporate and government paper of different credit qualities which may be both dollar and non-dollar denominated and aims at various points along the yield curve. Moreover, the fund uses an active trading methodology without costing too much, at least compared to other active options out there (Read: 2 Ways to Short the Dollar with ETFs).
Further, investors may benefit from the global fixed income exposure which the ETF provides, while the Sub-Adviser of the fund will undertake due responsibilities of assessing pertinent economic and market conditions.