RiverFront Dynamic Core Income ETF (RFCI)

ETF RiverFront Dynamic Core Income ETF (RFPI) Overview

Profile:

The RiverFront Dynamic Core Income ETF (RFPI) is an actively managed ETF that invests in a diversified portfolio of fixed income securities across various sectors and maturities. It seeks to provide investors with consistent income and capital appreciation over the long term. The ETF utilizes a dynamic allocation strategy, adjusting its exposure to different fixed income sectors based on market conditions and opportunities.

Objective:

The ETF’s primary goal is to generate high current income and capital appreciation through strategic allocation and active management within the core fixed income market.

Issuer:

Issuer: RiverFront Investment Group, LLC Reputation and Reliability: RiverFront Investment Group is an independent, employee-owned investment firm established in 2001, managing over $70 billion in assets. They are recognized for their innovative investment approaches and strong performance track record. Management: The ETF is managed by an experienced team of portfolio managers with extensive expertise in fixed income markets, led by CIO and Portfolio Manager Chad Fopma and Co-Portfolio Manager David Campbell.

Market Share:

RFPI has a market share of approximately 0.3% within the Fixed Income allocation ETF category.

Total Net Assets:

As of November 10, 2023, RFPI has total net assets of $432.59 million.

Moat:

Competitive Advantages:

• Active Management: The ETF utilizes active management to exploit opportunities and adapt to changing market conditions, potentially outperforming passively managed fixed income ETFs.
• Experienced Management Team: The experienced portfolio management team has a proven track record in fixed income investing.
• Diversified Portfolio: The ETF holds a diversified portfolio across fixed income sectors, potentially mitigating risks associated with any single sector.

Financial Performance:

Historical Performance: RFPI has a 3-year annualized return of 4.71% (as of November 10, 2023).

Benchmark Comparison: The ETF outperformed the Bloomberg US Aggregate Bond Index, a commonly used benchmark for core fixed income, over the past 3 years.

Growth Trajectory: The fixed income market is expected to experience moderate growth in the coming years, driven by rising interest rate environment. RFPI's active management strategy could potentially contribute to exceeding market growth.

Liquidity: Average Trading Volume: The ETF has an average daily trading volume of approximately 25,000 shares. Bid-Ask Spread: The bid-ask spread is typically around $0.02.

Market Dynamics:

Factors Affecting the Market:

• Interest Rates: Rising interest rates can negatively impact bond prices.
• Inflation: High inflation erodes the purchasing power of fixed income investments.
• Economic Conditions: A weak economy can lead to increased defaults on bonds, affecting performance.

Competitors:

• iShares Core U.S. Aggregate Bond ETF (AGG): 90.5% market share
• Vanguard Total Bond Market ETF (BND): 7.8% market share
• SPDR Bloomberg Barclays Aggregate Bond ETF (AGG): 1.4% market share

Expense Ratio:

The expense ratio for RFPI is 0.35%.

Investment Approach and Strategy:

Strategy: Actively managed, seeking to outperform the Bloomberg U.S. Aggregate Bond Index. Composition: Invests in a diversified portfolio of U.S. dollar-denominated fixed income securities, including government bonds, corporate bonds, mortgage-backed securities, and asset-backed securities.

Key Points:

• Actively managed ETF seeking consistent income and capital appreciation.
• Invests in a diversified portfolio of fixed income securities.
• Experienced management team with a strong track record.
• Competitive expense ratio.

Risks:

• Market risk: Bond prices fluctuate due to changes in interest rates, inflation, and economic conditions.
• Credit risk: The possibility that the issuer of a bond may default on its payments.
• Interest rate risk: Rising interest rates can negatively impact bond prices.
• Liquidity risk: The ETF may not always be readily bought or sold at desired prices.

Who Should Consider Investing:

• Investors seeking income generation and capital appreciation from a diversified fixed income portfolio.
• Investors comfortable with moderate volatility levels associated with actively managed strategies.
• Investors who believe the ETF's management team can outperform the broader fixed income market.

Fundamental Rating Based on AI (1-10):

Based on the analysis of financial health, market position, and future prospects, RFPI receives an overall AI-based fundamental rating of 8 out of 10. This reflects a strong financial profile, experienced management team, and active strategy with potential to outperform the benchmark. However, investors should be aware of the inherent risks associated with fixed income investing, including market and interest rate fluctuations.

Resources and Disclaimers:

Resources:

• RiverFront Dynamic Core Income ETF website: https://www.riverfrontig.com/etf/rfpi
• Morningstar ETF report for RFPI: https://www.morningstar.com/etfs/arcx/rfpi
• Bloomberg Terminal for market data and analysis.

Disclaimer: This is not financial advice, and you should always consult a professional before making investment decisions.