FIAX Profile
Nicholas Fixed Income Alternative ETF is designed to provide investors with a unique approach to fixed income investing by focusing primarily on U.S. Treasury securities and incorporating options trading strategies. The fund aims to invest at least 80% of its net assets, including borrowings for investment purposes, in U.S. Treasury fixed income securities. This allocation is intended to provide a stable and secure base for the fund’s investment portfolio, leveraging the safety and liquidity of U.S. Treasury instruments.
In addition to its core Treasury investments, the fund employs an options trading strategy to enhance its returns and manage risk. The ETF typically engages in writing index put options and call options with various expiration dates, including weekly, monthly, and quarterly. This strategy allows the fund to generate income from option premiums, while also providing flexibility to capitalize on different market conditions. The use of options aims to complement the fixed income component of the portfolio and potentially enhance overall performance.
The fund also utilizes credit spreads as part of its investment strategy, generally maintaining up to ten credit spreads at any given time. It can allocate up to 20% of its exposure to a single ETF or index credit spread at the time of purchase. This approach allows the fund to take advantage of relative value opportunities within the credit markets while managing exposure and risk. The focus on credit spreads provides a means of diversifying beyond traditional fixed income investments and accessing additional sources of potential return.
Managed by Nicholas Investment Partners, the ETF is non-diversified, meaning it may have concentrated holdings in specific securities or sectors. This strategy enables the fund to maintain a focused approach on its core investments and options trading while carefully managing its risk exposure. Nicholas Investment Partners brings expertise in fixed income and options strategies to the management of the fund, aiming to deliver a distinctive investment solution that combines the stability of U.S. Treasury securities with the potential for enhanced returns through active trading and credit spread strategies.
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