Newfleet Asset Management, the first affiliated manager to utilize the white-label exchange traded fund services of Virtus Investment Partners, added to its stable of fixed income ETFs last week with the debut of the Virtus Newfleet Dynamic Credit ETF (NYSEArca: BLHY).
“The Virtus Newfleet Dynamic Credit ETF seeks to provide a high level of current income and capital appreciation by combining two converging credit sectors, high-yield corporate bonds and floating bank loans. By actively managing the portfolio, Newfleet is able to allocate between both asset classes at any ratio within the fund. Additionally, should market conditions merit a temporary exit from credit, the fund can allocate as much as 100 percent to U.S. Treasuries,” according to a statement issued by Newfleet.
BLHY joins the Newfleet Multi-Sector Unconstrained Bond ETF (NYSEArca: NFLT), which debuted in August 2015. NFLT is managed by Newfleet Asset Management’s David Albrycht, president and chief investment officer; Jonathan Stanley, managing director, portfolio manager and sector manager for high yield credit; and Christopher Kelleher, senior managing director, senior portfolio manager and the head of institutional asset management.
BLHY “potential to generate competitive total return from both income and capital appreciation, as well as to provide a hedge against rising interest rate,” according to Newfleet.
BLHY’s managers look for companies with stable cash flow, deep competitive advantages, tendencies to avoid financial leverage and solid capital structures, among other factors. The new ETF can hold high yield corporate bonds and floating rate bank loans.