Hedge Fund Manager Launches an ETF That Bets on CEFs

Saba Capital investment process includes proprietary models that dynamically rank closed-end funds across a variety of factors, such as yield, discount to NAV and quality of underlying securities through a combination of fundamental analysis, quantitative analysis and proprietary screens.

The majority underlying holdings will be comprised of lower-rated securities and unrated securities of equivalent investment quality, which tend to generate the highest yield opportunities.

Underlying components may include equities, investment-grade securities and unrated securities, along with mortgage-related and other asset-backed securities; loan participation; inflation-protected securities; structured securities; variable; floating and inverse floating-rate investments; preferred stock; and derivative instruments. The underlying funds may also take short sales in securities or maintain a short position.

Furthermore, the fund may borrow for investment purposes and seek to hedge rate risk by engaging in short sales of U.S. Treasuries.

Current holdings include Adams Diversified Equity Fund, Alpine Total Dynamic Dividend, BlackRock Corporate High Yield, Delaware Enhanced Global Dividend and Dividend and Income Fund, among others.

For more information on new fund products, visit our new ETFs category.