Active Ultra Short Bond ETF Launches

October 10, 2019

Yesterday, ETF Managers Group launched a fund with Sit Fixed Income Advisors. The ETFMG Sit Ultra Short ETF (VALT) is actively managed and invests primarily in high quality short-term debt denominated in U.S. dollars.

VALT comes with an expense ratio of 0.30% and lists on the NYSE Arca.

The prospectus notes that the fund selects its holdings from debt issues that are rated within the top four rating categories of a ratings firm like Moody’s or S&P. The fund takes into account yield curve positioning, sector allocation and security selection, and targets an effective duration of more than two months and less than one year, according to the prospectus.

Sit is behind another ETF, the self-branded Sit Rising Rate ETF (RISE), which launched in 2015 and currently has a little more than $6 million in assets under management (AUM). The fund takes short positions in futures contracts on Treasury bonds.

Although there are more expensive ultra short bond ETFs, VALT is at the upper end of the range, and costs nearly twice as much as the largest actively managed ultra short ETF, the JPMorgan Ultra-Short Income ETF (JPST), which has more than $9 billion in AUM and charges an expense ratio of 0.18%.

Contact Heather Bell at [email protected]

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