Return Stacked Bonds & Merger Arbitrage ETF (RSBA US) – Portfolio Construction Methodology

The investment strategy guiding the actively managed Return Stacked Bonds & Merger Arbitrage ETF seeks to combine a core investment-grade bond allocation with a concurrently held, liquid merger-arbitrage sleeve, “stacking” two differentiated return streams in one vehicle. The bond sleeve targets broad, high-quality U.S. duration and credit exposures implemented via cash bonds and/or highly liquid bond instruments; portfolio risk anchors are interest-rate and spread beta with tight liquidity and collateral standards. The merger-arbitrage sleeve invests long announced acquirable targets and may short acquirers or use derivatives to isolate deal spreads, applying deal-level sizing based on probability, timeline, regulatory complexity, and downside-gap estimates. Gross and net exposure limits, stop-loss protocols around broken-deal outcomes, and sector/issuer caps control concentration. Daily risk is monitored across rate, credit, and event-risk buckets. Rebalancing aligns with deal milestones and roll schedules while maintaining capital efficiency and margin headroom.

To explore RSBA in more depth, visit our ETF analytics platform for institutional-grade insights — including performance and risk metrics, correlations, sensitivities, and factor exposure: https://www.etfstrategy.com/etf/RSBA_US