AAA Profile
The AXS First Priority CLO Bond ETF is an actively managed exchange-traded fund that focuses on providing investors with exposure to high-quality debt instruments. The fund primarily invests at least 80% of its net assets, including any borrowings for investment purposes, in AAA-rated first priority debt tranches of U.S. dollar-denominated collateralized loan obligations (CLOs). These CLOs are structured finance products that pool together loans, offering investors a way to gain access to the debt of multiple borrowers with varying risk profiles. By focusing on AAA-rated tranches, the fund seeks to offer a relatively secure investment option within the CLO market.
The fund's strategy is to invest across CLOs of varying maturities, allowing it to adapt to different market conditions and interest rate environments. This flexibility in maturity selection is a key component of the fund's active management approach, which distinguishes it from passively managed funds that typically aim to replicate the performance of a specific index. The funds active management enables it to adjust its portfolio in response to changes in credit markets, interest rates, and other macroeconomic factors, potentially enhancing returns and managing risk more effectively.
The AXS First Priority CLO Bond ETF does not seek to track any particular index, giving the fund manager greater discretion in selecting investments that align with the fund's objectives. This approach allows the fund to focus on the most attractive opportunities within the CLO market, rather than being constrained by the composition of an index. The fund's management team employs rigorous credit analysis and market research to identify and invest in CLO tranches that offer favorable risk-adjusted returns.
The fund's emphasis on AAA-rated tranches reflects its commitment to maintaining a high-quality portfolio, which is designed to appeal to investors seeking stable income with lower credit risk. By investing in these top-tier CLO tranches, the fund aims to provide a balance of income generation and capital preservation, making it an attractive option for those looking to diversify their fixed-income investments with exposure to the structured credit market.
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