Daily ETF Watch: Low Duration Fund Planned

Guggenheim files for an active limited-duration ETF.

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Reviewed by: Heather Bell
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Edited by: Heather Bell
Guggenheim Investments recently filed for an ETF that will be able to invest in a wide range of debt securities and investment vehicles that have performance characteristics similar to debt securities—like other ETFs and derivatives, among other investments. The Guggenheim Limited Duration ETF will typically target a dollar-weighted average duration of less than 3.5 years, the prospectus said.

The fund’s parameters include specific limitations and some guidelines, including that it cannot invest more than:

  • 35% of its portfolio in emerging market debt
  • 35% of its portfolio in debt that is less than investment grade
  • 20% of its portfolio in asset- or mortgage-backed securities
  • 20% of its portfolio in bank or corporate loans

The fund manager’s investment process relies heavily on research into individual securities and their peer groups, as well as market conditions and interest rates, among other criteria, the prospectus noted.

The filing did not include an expense ratio or ticker, but the principal listing exchange will be the Nasdaq.

The fund outlined in the filing is very similar in approach to the SPDR DoubleLine Short Duration Total Return Tactical ETF (STOT), which launched yesterday and includes Jeffrey Gundlach among its management team. STOT targets a duration of three years or less.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.