RISR Profile
The FolioBeyond Rising Rates ETF is designed to strategically invest in interest-only mortgage-backed securities (MBS IOs) and U.S. Treasury bonds, focusing on capitalizing on interest rate movements. This actively managed fund uses a dynamic allocation strategy to adjust its investments based on a range of financial and macroeconomic factors.
The fund primarily invests in MBS IOs, which are securities derived from the interest payments on mortgage-backed securities. These securities can be particularly sensitive to changes in interest rates, providing potential benefits in a rising rate environment. Additionally, the fund includes U.S. Treasury bonds, which are considered low-risk assets and provide stability to the portfolio.
The allocation between MBS IOs and U.S. Treasuries is not fixed but varies based on relative value relationships and market conditions. The sub-adviser evaluates a range of factors, including historical yield levels, volatility, inflation, and economic growth indicators. This approach allows the fund to adjust its holdings in response to changing market dynamics and economic conditions, aiming to optimize returns and manage risk.
The funds non-diversified nature means it does not invest in a broad array of asset classes but instead focuses on a specialized investment strategy. This concentration allows the fund to leverage opportunities in its chosen sectors, with the allocation strategy tailored to exploit shifts in interest rates and market conditions. By concentrating on MBS IOs and U.S. Treasuries, the fund seeks to provide investors with targeted exposure to interest rate fluctuations and related investment opportunities.
|
