Virtus Investment Partners recently launched a new actively managed fixed income ETF that primarily invests in high-quality, short-duration debt from multiple sectors. The Virtus Newfleet Short Duration Core Plus Bond ETF (SDCP) intends to provide high levels of returns and income while limiting variance in net asset value.
SDCP will also selectively invest in securities that are below investment-grade if yields are sufficiently attractive. It aims to achieve these goals through prudent risk management, a disciplined investment process, and finding opportunities in undervalued parts of the market. The fund will target securities with a duration between 1 and 3 years and will charge 35 basis points.
SDCP’s subadvisors is Newfleet Asset Management which has considerable expertise in all parts of the fixed income market including newer, more niche, and out-of-favor sectors. It believes active sector rotation and risk management are keys to portfolio construction.
Overall, SDCP’s launch is a continuation of a major theme in 2023 - the growth of fixed income ETFs. According to Todd Rosenbluth, the head of Research at VettaFI, fixed income ETFs comprise only 20% of the total market but account for 40% of inflows so far this year.
Finsum: Virtus is launching a new short-duration focused active fixed income ETF with Newfleet Asset Management as an advisor.