Guggenheim Investments launched its own actively managed bond exchange traded fund, providing investors with another means to bet on a money manager’s ability to effectively navigate the fixed-income market in a rising rate environment.
The Guggenheim Total Return Bond ETF (NYSEArca: GTO) utilizes a multi-sector strategy and primarily holds investment-grade fixed-income securities across multiple sectors, according to a press release. GTO comes with a 0.50% expense ratio.
“With the traditional view of core fixed-income management quickly becoming antiquated in a persistent low-yield environment, investors and advisors must begin looking toward alternative solutions,” Scott Minerd, Chiarman of Investments and Global CIO for Guggenheim Investments, said in the press release.
Currently, GTO includes a hefty 33.8% cash position, along with a large 25.0% weight in money market or cash alternatives. Additionally, the ETF includes 32.8% in Treasuries, 1.1% in mortgage bonds and 7.4% in investment-grade corporate debt.
The portfolio managers will try to generate alpha through duration management, relative valuation, credit analysis, information premiums and trade executions.