Virtus Newfleet ABS/MBS ETF (VABS)

Overview

The Virtus Newfleet ABS/MBS ETF (VMBS) is an actively managed ETF that seeks current income by investing primarily in asset-backed securities (ABS) and mortgage-backed securities (MBS). It focuses on securities with attractive relative valuations and aims to generate returns above its benchmark.

Reputation and Reliability

Virtus Investment Partners is a multi-boutique asset manager with a strong reputation for providing diverse investment solutions. They have a solid track record in managing fixed income portfolios.

Management Expertise

Newfleet Asset Management, a Virtus affiliate, manages the ETF and has extensive experience in structured credit and fixed income markets. The portfolio managers possess deep expertise in ABS and MBS investing.

Goal

To seek current income.

Investment Approach and Strategy

Strategy: The ETF employs an active management strategy, selecting securities based on fundamental analysis, relative value considerations, and macroeconomic outlook.

Composition The ETF primarily invests in ABS and MBS, including agency and non-agency securities. It may also invest in other fixed income instruments.

Market Share: VMBS's market share within the ABS/MBS ETF sector is moderate, reflecting its actively managed approach.

Total Net Assets (AUM): 42600000

Key Competitors

• iShares MBS ETF (MBB)
• Vanguard Mortgage-Backed Securities ETF (VMBS)
• SPDR Portfolio Aggregate Bond ETF (SPAB)

Competitive Landscape

The ABS/MBS ETF market is dominated by large, passively managed ETFs like MBB and VMBS. VMBS differentiates itself through its active management, potentially offering higher returns but also exposing investors to higher fees and manager risk. Its smaller AUM affects liquidity compared to the leaders, but its active approach can find value in less popular securities.

Historical Performance: Historical performance data should be obtained from reliable financial data sources to accurately represent the ETF's past performance over different time periods.

Benchmark Comparison: Compare the ETF's performance against a relevant benchmark, such as the Bloomberg Barclays US MBS Index, to assess its effectiveness.

Expense Ratio: 0.4

Average Trading Volume

The average trading volume is moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight but can widen during periods of market volatility.

Market Environment Factors

Economic indicators such as interest rates, inflation, and housing market trends significantly impact VMBS's performance. Changes in monetary policy and credit spreads also play a crucial role.

Growth Trajectory

The ETF's growth is tied to the demand for fixed income investments and the performance of the ABS/MBS market. As an actively managed fund, strategy and holdings will change as market conditions evolve.

Competitive Edge

VMBS's competitive advantage lies in its active management, which allows it to capitalize on market inefficiencies and relative value opportunities within the ABS/MBS sector. The experienced management team at Newfleet leverages deep knowledge of structured credit markets. This active approach can potentially deliver higher returns than passively managed competitors, although it also introduces manager risk. The team's expertise in analyzing complex ABS and MBS structures provides an edge in identifying undervalued securities.

Volatility

VMBS's volatility is moderate, reflecting the generally stable nature of the ABS/MBS market.

Market Risk

Key risks include interest rate risk, credit risk associated with the underlying securities, and prepayment risk. Changes in interest rates can impact the value of the ETF's holdings, while credit risk arises from potential defaults by borrowers.

Ideal Investor Profile

VMBS is suitable for investors seeking current income and exposure to the ABS/MBS market. It may be appropriate for those willing to accept slightly higher fees for potential outperformance through active management.

Market Risk

VMBS is more suitable for long-term investors seeking income. While active traders might utilize it, its core appeal lies in consistent yield generation rather than short-term gains.

The Virtus Newfleet ABS/MBS ETF (VMBS) offers investors actively managed exposure to the ABS/MBS market, seeking to generate current income. Its active management strategy, spearheaded by Newfleet Asset Management, differentiates it from passively managed competitors like MBB and VMBS. While potentially offering higher returns, investors should consider the higher expense ratio and manager risk. The ETF is suitable for long-term investors seeking a steady income stream from structured credit securities.

Data Sources:

• Virtus Investment Partners website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.