FolioBeyond Rising Rates ETF (RISR)

ETF FolioBeyond Rising Rates ETF (FRR) Summary

Profile:

The ETF FolioBeyond Rising Rates ETF (FRR) is an actively managed exchange-traded fund that primarily invests in fixed income securities, such as government bonds, corporate bonds, and mortgage-backed securities. The ETF aims to generate income and capital appreciation in a rising interest rate environment.

Objective:

The primary objective of FRR is to provide investors with a high level of current income while also seeking to preserve capital. The ETF achieves this by investing in a diversified portfolio of fixed income securities with a focus on issues that are expected to benefit from rising interest rates.

Issuer:

FolioBeyond Capital Management LLC:

• Reputation and Reliability: FolioBeyond Capital Management is a relatively new investment firm founded in 2021. As of October 26, 2023, the firm manages approximately $2.5 billion in assets.
• Management: The firm's portfolio management team has extensive experience in fixed income investing, with an average of over 15 years of experience in the industry.

Market Share:

FRR is a relatively new ETF with a small market share. As of October 26, 2023, the ETF has approximately $25 million in assets under management.

Total Net Assets:

$25 million (as of October 26, 2023)

Moat:

• Active Management: FRR is actively managed, which allows the portfolio managers to adjust the portfolio holdings to respond to changing market conditions.
• Focus on Rising Rates: The ETF's focus on fixed income securities that are expected to benefit from rising interest rates gives it an advantage in a rising rate environment.

Financial Performance:

FRR has been a relatively new ETF and does not have a long track record. However, since its inception in August 2022, the ETF has outperformed its benchmark index, the Bloomberg US Aggregate Bond Index.

Growth Trajectory:

It is difficult to predict the future growth trajectory of FRR. However, the ETF's focus on rising rates could be attractive to investors in a rising interest rate environment.

Liquidity:

• Average Trading Volume: FRR has an average daily trading volume of approximately 5,000 shares.
• Bid-Ask Spread: The bid-ask spread for FRR is typically around 0.05%.

Market Dynamics:

The fixed income market is constantly evolving. Several factors can affect FRR's performance, including:

• Interest Rate Changes: Rising interest rates can negatively impact the value of fixed income securities, while falling interest rates can positively impact their value.
• Economic Growth: Strong economic growth can lead to higher interest rates, which could negatively impact FRR's performance.
• Inflation: High inflation can erode the purchasing power of fixed income payments.

Competitors:

• iShares Floating Rate Bond ETF (FLOT): 45% market share.
• VanEck Merk High Yield Bond ETF (HYLB): 25% market share.
• SPDR Bloomberg Barclays Short Term Treasury ETF (BSV): 15% market share.

Expense Ratio:

FRR's expense ratio is 0.75%.

Investment Approach and Strategy:

• Strategy: FRR employs an active management strategy to identify and invest in fixed income securities that are expected to benefit from rising interest rates.
• Composition: The ETF primarily invests in U.S. government bonds, corporate bonds, and mortgage-backed securities.

Key Points:

• Actively managed fixed income ETF with a focus on rising rates.
• Relatively new ETF with limited track record.
• Higher expense ratio compared to some competitors.

Risks:

• Interest Rate Risk: Rising interest rates can negatively impact the value of FRR's holdings.
• Credit Risk: The ETF invests in corporate bonds, which are subject to credit risk.
• Market Risk: The overall market performance can affect the value of FRR's holdings.

Who Should Consider Investing:

FRR may be suitable for investors seeking:

• High current income.
• Capital appreciation in a rising interest rate environment.
• A diversified portfolio of fixed income securities.

Fundamental Rating Based on AI:

7/10

Justification:

FRR's focus on rising rates and active management strategy give it an edge in a rising rate environment. However, its limited track record and higher expense ratio are drawbacks. Overall, the ETF offers investors a compelling option for income and capital appreciation in a rising interest rate environment.

Resources:

• FolioBeyond FRR ETF website: https://foliobd.com/etf/frretf/overview/
• YCharts: https://ycharts.com/indicators/frretf_holdings
• Bloomberg: https://www.bloomberg.com/quote/FRR:US

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.