The barbell structure will help CUMB benefit from steepness of the muni yield curve and allow it to capitalize on moves in the muni yield curve and municipal “centric” events like pre-refunding of muni bonds and upgrades to credit.
The fund does not come with a target duration, so the managers may shift from shorter to longer duration based on their interest-rate forecasts and view on the fixed-income outlook.
“The Fund will evolve over the interest rate cycle with changes in durations and maturities depending upon economic outlook, inflation, Federal Reserve decision making, and the shape of the yield curve. Cumberland’s philosophy centers on the fact that markets often become significantly overvalued or undervalued, but will revert to mean valuations over time,” according to Cumberland.
The active ETF may hold general obligation bonds, revenue bonds, discount bonds, premium bonds, zero coupon bonds and private activity bonds. Debt will generally be rated “A” or above.
For more information on new fund products, visit our new ETFs category.