Brokerage infrastructure platform DriveWealth has made its ETF debut with the launch of two fixed income funds that aim to deliver a pre-determined level of yield while minimizing portfolio risk.
Bob Cortright, Founder and CEO of DriveWealth.
The DriveWealth Steady Saver ETF (STBL US) and DriveWealth Power Saver ETF (EERN US) have been listed on NYSE Arca and come with expense ratios of 0.66% and 1.49%, respectively.
The funds are actively managed by portfolio managers at YieldX, an API-driven fixed income investment platform built around artificial intelligence.
YieldX’s proprietary portfolio optimizer, which is run on a daily basis, includes a range of quantitative pricing, risk factor, stress testing, and economic sensitivity models. The technology seeks to create optimal portfolios for the ETFs whereby STBL and EERN will deliver net yields of 3% and 8%, respectively while maintaining lower risk compared to rival funds offering similar income.
Eligible securities for portfolio inclusion include investment-grade and high-yield corporate bonds, asset-backed and mortgage-back securities, emerging market securities, sovereign and municipal debt, and preferred securities, as well as ETFs that hold these investments.
Bob Cortright, Founder and CEO of DriveWealth, said: “For too long, bank savings accounts have yielded next to nothing, and in many parts of the world, savers are effectively forced to pay banks to keep their money. This has led to a lot of frustration as consumers desire to earn something on their hard-earned savings without taking too much risk.
“Our partners have been asking for thoughtful solutions to this problem – their investors want access to investments that provide income, diversification, and an attractive return on capital. With YieldX, we believe we’re bringing innovative technology, investing, and risk management processes from a proven team of Wall Street veterans straight to Main Street for the benefit of yield-starved global consumers. The DriveWealth ETFs can be an important part of a saver’s financial picture and a retail investor’s overall portfolio.”
Adam Green, CEO of YieldX, added: “As a leader in embedded finance, DriveWealth is a great partner for YieldX. We are both technology-forward companies with a mission of making investing easy and accessible to retail investors everywhere. The DriveWealth ETFs are hoping to provide savers and retail investors access to income-generating investment strategies, underpinned by institutional-grade portfolio construction, optimization, and risk analytics that have only been previously available to Wall Street clients.”