Guggenheim unveils actively managed total return bond ETF

Feb 10th, 2016 | By | Category: Fixed Income

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Guggenheim Investments, a US-based provider of exchange-traded funds, has introduced the Guggenheim Total Return Bond ETF (NYSE Arca: GTO). The fund is actively managed, investing primarily in investment-grade fixed income securities across multiple sectors.

Guggenheim unveils actively managed total return bond ETF

Scott Minerd, Chairman of Investments and Global CIO, Guggenheim Investments.

This is the second Guggenheim ETF, following the launch of the Guggenheim Enhanced Short Duration ETF (GSY) in February 2008, to combine the benefits of an ETF structure with the dynamics of an actively managed fixed income strategy.

The fund utilises both quantitative and qualitative processes to understand and manage risk while seeking to identify and exploit market opportunities. Enhanced performance is pursued through five avenues: duration, relative sector value, credit analysis, information premiums, and best trade execution. Both top-down macro and bottom-up fundamental analyses are used.

“With the traditional view of core fixed-income management quickly becoming antiquated in a persistent low yield environment, investors and advisors must begin looking toward alternative solutions,” said Scott Minerd, Chairman of Investments and Global CIO for Guggenheim Investments.

“Nearly two-thirds of the Barclays Capital US Aggregate Bond Index is composed of low-yielding government or government-related securities. Our investment team’s rigorous and specialized credit analysis work to uncover attractive duration and yield in otherwise underappreciated asset classes, such as commercial asset-backed securities and collateral loan obligations seeking to deliver strong performance independent of the Barclays Aggregate.”

The fund has ongoing management fees of 0.50% per annum.

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