ALPS Drafts Active Fixed-Income ETF

July 22, 2010

ALPS joins with Grail to offer an actively managed global fixed-income ETF with few restrictions on what it might own.

ALPS Advisors, the Denver-based exchange-traded fund manager known as one of the pioneers in the ETF marketplace, has filed papers with the Securities and Exchange Commission to offer an actively managed global fixed-income fund that could own debt securities comprising broad ranges of maturities and credit quality.

The RiverFront Strategic Income Fund will invest in a basket of corporate as well as government fixed-income securities across the yield curve that are both dollar- and nondollar-denominated. Because the ETF hasn’t established any credit rating criteria for those securities, it could invest entirely in junk bonds.

The fund, which will be ALPS’ first fixed-income strategy, will come with a net expense ratio of 0.24 percent after a fee waiver. Grail Advisors, a San Francisco investment firm specializing in active ETFs, will serve as the fund’s adviser, and RiverFront Investment Group will be subadviser, according to the filing.

Ultimately, the new ETF will “seek total return with an emphasis on income as the source of that total return,” the filing said.

ALPS’ roster of ETFs currently includes a dozen commodities ETFs as well as some sector, private-equity and real estate strategies.


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