ALPS Portfolio Solutions has partnered with RiverFront Investment Group to launch two actively managed bond exchange traded funds to help investors diminish downside risks without missing any upside potential.
The actively managed RiverFront Dynamic Core Income ETF (NYSEArca: RFCI) and RiverFront Dynamic Unconstrained Income ETF (NYSEArca: RFUN) will seek total return, with an emphasis on income as a source of that return. Both ETFs have a 0.51% expense ratio.
The RiverFront Dynamic Core Income ETF and RiverFront Dynamic Unconstrained Income ETF will include global fixed-income securities and is constructed through a two-step process. First off, the fund manager selects strategic allocations among different fixed-income assets classes, with an objective being to construct an allocation that is designed to to balance the probability of upside returns with downside risks for investors with a five-year time frame. Secondly, the portfolio is tactically adjusted as market conditions warrant and determines security selection within within asset classes to maximize potential return over time.
Both funds also model historical returns as a function of initial valuation conditions and creates estimates of potential returns and downside risk consistent with historical market behaviors. Additionally, they may implement a mean-reservation optimization process that help determine the weightings of the various fixed-income assets.