ETF Watch: Cumberland-Managed Bond Fund Debuts

Well-known money manager is subadvising Virtus new active ETF.

Today Virtus is rolling out another actively managed bond ETF, but this one will be managed by Cumberland Advisors’ David Kotok and John Mousseau. The Virtus Cumberland Municipal Bond ETF (CUMB) comes with an expense ratio of 0.59%.

The fund is listed on the NYSE Arca, where it joins Virtus’ other actively managed bond ETFs, which are both managed by Newfleet Asset Management and have combined assets of more than $300 million.

Cumberland Advisors is known for its expertise in municipal bond investing and manages roughly $2.4 billion in fixed-income assets.

CUMB’s stated objective is to “provide a competitive level of current income” that is also tax-exempt and to preserve capital. The prospectus decribes its approach as a “barbell strategy” with more assets concentrated in bonds with short-term and long-term maturities than in those with midterm maturities.

The fund can invest in a wide range of types of muni bond, including general-obligation, revenue, discount, premium, zero-coupon and private-activity bonds. CUMB’s duration varies based on interest rate expectations and the fixed-income market in general. Its holdings must have an A rating or higher, the prospectus says, meaning they are among the highest-quality investment-grade bonds.  

There were already three actively managed muni bond ETFs trading on U.S. markets prior to CUMB’s launch. The largest is the PIMCO Intermediate Municipal Bond Active ETF (MUNI), which has $273 million in assets under management.

Contact Heather Bell at [email protected].