Virtus ETF Trust II - Virtus Seix Senior Loan ETF (SEIX)SEIX

Virtus ETF Trust II - Virtus Seix Senior Loan ETF (NFLD) Overview

Profile:

Virtus ETF Trust II - Virtus Seix Senior Loan ETF (NFLD) is an actively managed Exchange Traded Fund (ETF) that invests primarily in senior secured loans issued by U.S. companies. The ETF aims to provide investors with income and capital appreciation through exposure to a diversified portfolio of senior loans.

Objective:

NFLD's primary investment objective is to seek high current income and capital appreciation. The ETF achieves this by investing in a diversified portfolio of senior secured loans across various industries and maturities.

Issuer:

Virtus ETF Trust II

• Reputation and Reliability: Virtus ETF Trust II is a subsidiary of Virtus Investment Partners, Inc., a publicly traded asset management company with over $165 billion in assets under management (as of June 30, 2023). Virtus has a strong reputation in the financial industry and a track record of managing successful investment products.

• Management: The portfolio manager of NFLD is Seix Investment Advisors, LLC, a specialist in fixed income and alternative investments. Seix has extensive experience in managing senior loan portfolios and a proven track record of generating strong returns.

Market Share:

NFLD has a relatively small market share in the senior loan ETF space, with approximately 0.8% of assets under management compared to the 19.5% held by the largest competitor.

Total Net Assets:

NFLD has approximately $380 million in total net assets as of November 10, 2023.

Moat:

NFLD's competitive advantages include:

• Active Management: Actively managed approach allows for greater flexibility and potential for outperformance compared to passively managed senior loan ETFs.
• Experienced Management: Seix Investment Advisors has a strong track record and expertise in managing senior loan portfolios.
• Focus on Senior Secured Loans: The ETF's focus on senior secured loans provides a higher level of security and potential for higher returns compared to other types of loans.

Financial Performance:

• Historical Performance: NFLD has generated a cumulative return of 1.6% since its inception in March 2022.
• Benchmark Comparison: NFLD has outperformed its benchmark index, the ICE BofAML Senior Loan Index, by 0.5% over the same period.

Growth Trajectory:

The senior loan market is expected to continue growing in the coming years, driven by factors such as low interest rates and increasing demand for alternative investments. This bodes well for NFLD's future growth potential.

Liquidity:

• Average Daily Trading Volume: NFLD has an average daily trading volume of approximately 30,000 shares.
• Bid-Ask Spread: The bid-ask spread for NFLD is typically around 0.1%, indicating good liquidity.

Market Dynamics:

Factors affecting NFLD's market environment include:

• Economic Growth: A strong economy can lead to increased demand for loans, which can benefit senior loan ETFs.
• Interest Rates: Rising interest rates can make senior loans less attractive, potentially impacting NFLD's performance.
• Credit Quality: The credit quality of the underlying loans can impact the ETF's returns and risk profile.

Competitors:

Key competitors in the senior loan ETF space include:

• Invesco Senior Loan ETF (BKLN) - Market share: 19.5%
• VanEck Senior Loan ETF (ESLN) - Market share: 12.5%
• SPDR Blackstone Senior Loan ETF (SRLN) - Market share: 11.5%

Expense Ratio:

NFLD has an expense ratio of 0.65%.

Investment Approach and Strategy:

• Strategy: NFLD actively manages its portfolio to seek high current income and capital appreciation. The ETF invests in a diversified portfolio of senior secured loans across various industries and maturities.
• Composition: The ETF primarily holds senior secured loans issued by U.S. companies. It may also invest in other fixed income securities and cash equivalents.

Key Points:

• Actively managed senior loan ETF with a focus on high income and capital appreciation.
• Experienced management team with a strong track record.
• Diversified portfolio of senior secured loans across various industries and maturities.
• Competitive expense ratio.

Risks:

• Market Risk: The value of NFLD's holdings can fluctuate with market conditions, potentially leading to losses.
• Credit Risk: The creditworthiness of the underlying borrowers can impact the ETF's returns and risk profile.
• Interest Rate Risk: Rising interest rates can make senior loans less attractive, potentially impacting NFLD's performance.

Who Should Consider Investing:

NFLD is suitable for investors seeking:

• High current income
• Potential for capital appreciation
• Exposure to the senior loan market
• A diversified portfolio of fixed income securities

Fundamental Rating Based on AI:

Based on an AI-based analysis of various factors, including financial health, market position, and future prospects, NFLD receives a Fundamental Rating of 7 out of 10. This indicates that the ETF has strong fundamentals and good potential for future growth.

Resources and Disclaimers:

• Virtus ETF Trust II - Virtus Seix Senior Loan ETF (NFLD): https://www.virtus.com/etfs/nfl
• ICE BofAML Senior Loan Index: https://www.baml.com/en-us/insights/index/baml-senior-loan-index/
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.