Anfield Capital launches unconstrained active fixed income ETF

Sep 18th, 2018 | By | Category: Fixed Income

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Anfield Capital has launched the Anfield Universal Fixed Income ETF (AFIF US) on Cboe BZX. The fund offers an actively managed global fixed income strategy that is unconstrained in its investment approach.

Unconstrained bond ETFs

AFIF is unconstrained in its investment approach, investing across different security types, countries, currencies, sectors and maturities.

AFIF is the sister fund to the firm’s mutual fund – the Anfield Universal Fixed income Fund – which has a five-year track record.

It seeks a blend of income and capital appreciation and has broad flexibility to allocate across different security types, countries, currencies, sectors and maturities.

The fund can invest in corporate bonds, US government and agency securities, master-limited partners, private debt, foreign sovereign bonds, convertible securities, bank loans, asset-backed securities, mortgage-backed securities and cash equivalent instruments.

According to the fund’s prospectus, the fund may also dip into dividend-paying common stocks as well as certain derivatives, although the latter will be used to refine existing strategies. Eligible derivatives include futures, options, credit default swaps, total return swaps and repurchase agreements.

The fund combines top-down macro orientation with bottom-up security selection that favours higher quality and value companies. It has no target duration or maturity, and the managers pursue a moderate and incremental approach to portfolio.

It comes with an expense ratio of 0.95%, which is somewhat pricey compared to, say, Vanguard‘s recently launched global aggregate Vanguard Total World Bond ETF (BNDW US) which costs just 0.09%. Of course, there are material differences between these two funds and the additional fees may well be justified by superior performance.

Indeed, Anfield’s existing mutual fund version of the new ETF has performed relatively well when compared with the Bloomberg Barclays US Aggregate Index and the Bloomberg Barclays US International Aggregate Index. It has returned 3.1% per annum over the past five years, compared to 2.5% and 2.0% for the US and international indices respectively.

The new ETF becomes the firm’s second ETF after the Anfield Capital Diversified Alternatives ETF (DALT US). DALT is also actively managed and provides exposure to closed-end funds (CEFs), business development companies, and real estate investment trusts (REITs) via third-party ETFs. It has $35 million in assets under management and comes with an expense ratio of 1.30%.

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