Diffractive Managers Group subsidiary F/m Investments LLC has launched the F/m Opportunistic Income ETF (XFIX) on the Nasdaq. XFIX seeks to maximize total return by identifying undervalued and opportunistic sectors and securities in the U.S. fixed income markets. It applies a “go anywhere” domestic approach to seek higher levels of total return compared to sector-specific or target-duration strategies.
XFIX invests in a flexible array of investments, including investment grade and high yield corporate and municipal bonds. It also targets U.S. government and agency securities, and mortgage-backed securities and preferred stocks. The fund also invests in specialty issues, including $25 par value baby bonds.
XFIX expands access to a separately managed account strategy F/m Investment affiliate Genoa Asset Management launched in 2009.
“We are pleased to offer XFIX as an actively managed ETF and make this strategy, previously only available in a separately managed account, broadly available to investors,” said F/m CIO Alexander Morris.
Added Morris: “XFIX builds upon our innovative US Treasury ETF suite and recent novel mutual fund exemptive relief application. We look forward to more innovation and ETFs from our team.”
XFIX employs a dynamic investment process using several points of emphasis. It searches for relative value across the yield curve, credit spectrum, and individual issues. The fund also implements opportunities through targeted security selection and nimble trading.
In addition, XFIX also seeks to realize profits when positions have achieved full value in the managers’ judgment. It redeploys capital in an ongoing search for relative value. Peter Baden, creator and manager of the corresponding SMA strategy since its inception in 2009, will be lead portfolio manager.
“My portfolio management team and I will follow the same process in the ETF that has served our SMA clients since 2009,” said Baden. “We believe we are well positioned to continue taking advantage of macroeconomic shifts that can create attractive fixed income investment opportunities.”
F/m Investments is launching XFIX through its affiliate North Slope Capital, a white-label ETF and mutual fund issuer.
“This firm has been an innovator in the fixed income ETF space,” said VettaFi’s head of research Todd Rosenbluth. “It’s very exciting to see them expand their lineup beyond popular Treasury ETFs.”
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