New issuer Spinnaker ETF Trust has rolled out its first two ETFs on NYSE Arca under the Fieldstone brand name. The Fieldstone Merlin Dynamic Large Cap Growth ETF (FMDG) and the Fieldstone/UVA Unconstrained Medium-Term Fixed Income ETF (FFIU) are both actively managed and give investors exposure to US large-caps and global fixed income respectively.

Newcomer Spinnaker launches two active ETFs

FMDG is sub-advised by Merlin Asset Management, a Boston-based investment consultancy. The fund consists of 25 large-cap US equities that Merlin identifies as having strong growth potential over a three to five year time horizon.

Merlin describes the selection process as “a comprehensive multivariate approach combining bottom-up, top-down and quantitative evaluation”, and states that companies that pass this selection process are characterised by “high levels of profitability and earnings growth, high quality and predictable earnings and shares that trade at a reasonable valuation”.

The selected securities are equally weighted in the portfolio and the fund has a total expense ratio (TER) of 0.80%.

FFIU is sub-advised by Universal Value Investors (UVA), an investment consultancy based in Reno, Nevada. As its name suggests, the fund is unconstrained, meaning it can invest in debt securities of any kind regardless of credit rating.

The fund’s prospectus states it will aim to invest the majority of the fund in securities rated BB and above, with a maximum of 20% reserved for lower grade and unrated securities. However, the prospectus also states that mortgage-backed securities (MBS) do not count towards this 20%, meaning the fund could theoretically be entirely comprised of unrated, unsecured, subprime MBS.

UVA aims to set the dollar-weighted average effective duration to between four and seven years, although this may vary depending on market conditions. The fund has a TER of 0.50%.