Fixed Income ETF-Of-ETFs Launches

August 18, 2020

Today, Anfield Capital Management and sister firm Regents Park Funds have rolled out an actively managed ETF-of-ETFs designed as a core holding and as a complement to the $122 million Anfield Universal Fixed Income ETF (AFIF). The Anfield Dynamic Fixed Income ETF (ADFI) was originally supposed to be a tactical fund, but has been revised as a dynamic strategy to better fit the current fixed income environment.

The fund comes with an expense ratio of 1.42% and lists on Cboe Global Markets, the parent company of ETF.com.

 

Strategy

Anfield has largely evolved into an outsourced CIO over the past few years, according to CEO David Young. As such, its ETFs are designed for in-house use in its own portfolios. He notes that their clients didn’t really need a tactical fund in the current environment, which he also points out is very challenging to tactical managers.

“You’re either really right or you’re really wrong right now,” he said.  “Our clients want something that is dynamic. It’s not strategic or a buy-and-hold index fund or actively managed around an index, like a core or core-plus bond fund, etc. To me, dynamic is something between benchmark plus or core-plus and ‘true’ tactical. We’re going to make meaningful moves, but it won’t be one or two strategy decisions dominating our performance like in a tactical strategy.”

The fund invests in 10-20 fixed income ETFs across a broad spectrum of categories with the goal of beating traditional bond indices and styles, according to the prospectus. The fund’s approach seeks to avoid downturns while taking advantage of opportunities within the market. The document also notes that the fund may have significant exposure to non-U.S. securities, including those issued in emerging markets.

“This has been designed to do two things. No. 1 to be a core fixed income holding. You could build your entire fixed income compartment around this,” Young said. “It’s also designed and managed, a little bit out of the corner of one eye, to pair with our universal fixed income strategy… We actually think the combination of [AFIF and ADFI] is best for your bond portfolio. It’s really our best top-down ideas in the dynamic fund commingled with our best bottom-up ideas in the universal fund.”  

Anfield currently offers four other ETFs—all actively managed—via issuer Regents Park, the largest of which is AFIF.

Contact Heather Bell at [email protected]

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