Hougan: 10 Great ETFs You Don't Know (Part 1)

April 25, 2014

Forgotten ETF #8: Riverfront Strategic Income (RIGS)

AUM: $227M
ER: 0.22 percent

The RiverFront Strategic Income Fund is an odd ETF. It’s an actively managed unrestricted global bond ETF that charges a rock-bottom expense ratio of just 0.22 percent. That shockingly low fee comes in part because of a fee waiver that could expire in October 2014, but even if it did, the expense ratio would hang below 0.50 percent.

The fund is a go-anywhere bond fund, with the ability to own essentially any debt: U.S. or foreign, government or corporates, junk or investment grade. Its current portfolio loads up on short-term junk bonds, manages a more than 4 percent yield to maturity with a duration below 4. That’s pretty attractive in today’s market.

I find RIGS interesting for the same reason I find Pimco’s Total Return Bond Fund (BOND | B) interesting: The bond space is a wild and wooly market, and having a smart, active manager eyeing the market isn’t a crazy idea. I’ve been impressed by the thoughtfulness of the team at RiverFront, and the fund has performed exceptionally well, strongly outperforming BOND since inception. When you add in an ultra-low expense ratio, it’s worth a look.

RIGS_BOND

 

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