SS&C ALPS Advisors’ new bond ETF can serve as a core holding in portfolios.
The ALPS/SMITH Core Plus Bond ETF (SMTH ) invests at least 80% of its net assets in bonds. This can include government notes and bonds, corporate bonds, convertible bonds, commercial and residential mortgage-backed securities, and zero-coupon bonds.
The fund is actively managed, targeting a weighted average effective duration within 40% of the current effective duration of the Bloomberg U.S. Aggregate Bond Index. SMTH generates returns utilizing a bottom-up fundamental analysis with a macro overlay. This introduces the potential for lower risk and greater returns than the Bloomberg U.S. Aggregate Bond Index.
The core plus bond ETF can also invest in commercial loans, money market instruments, foreign debt securities, and so-called junk bonds.
“Advisors have embraced actively managed fixed income ETFs in recent years,” Todd Rosenbluth, head of research at VettaFi, said.
“Funds like SMTH provide the potential benefits of credit and rate risk management through a more, transparent, liquid, and tax-efficient vehicle. Though the ETF is relatively new, management brings significant experience," he added
ALPS' Core Plus Bond ETF Sees Strong Flows
SMTH was launched last month and has quickly garnered significant assets under management. The $128 million fund has seen $116 million in net flows since its December 6, 2023 inception.
SMTH is the fifth strategy in SS&C ALPS Advisors’ lineup to be sub-advised by Smith Capital. Notably, this fund is the first strategy from ALPS and Smith offered in an ETF wrapper.
Smith’s investment-centric team averages over 13 years of experience, including previous rising rate environments, according to ALPS. Furthermore, the firm’s results are driven by a process with deep roots in fundamental research, complemented by quantitative validation and the use of technology.
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