On Tuesday, DriveWealth, a global infrastructure platform, announced the launch of two new ETFs that are yield-focused, fixed income ETFs. The ETFs will offer retail investors alternatives to low yielding cash accounts, according to the press release.
DriveWealth has partnered with YieldX to provide the ETFs that utilize YieldX’s API-driven fixed income digital platform. Driven by artificial intelligence, the funds will optimize yield, expenses and risk-adjusted returns, based on an investor’s chosen risk/reward profile.
“For too long, bank savings accounts and CDs have yielded next to nothing, and in many parts of the world, savers are effectively forced to pay banks to keep their money,” said Bob Cortright, Founder and CEO of DriveWealth said in the release. “This has led to a lot of frustration as consumers desire to earn something on their hard-earned savings without taking too much risk. Our partners have been asking for thoughtful solutions to this problem—their investors want access to investments that provide income, diversification and an attractive return on capital. With YieldX, we believe we’re bringing innovative technology, investing and risk management processes from a proven team of Wall Street veterans straight to Main Street for the benefit of yield-starved global consumers. The DriveWealth ETFs can be an important part of a saver’s financial picture and a retail investor’s overall portfolio.”
STBL: For Monthly Income
The DriveWealth Steady Saver ETF (STBL) and the DriveWealth Power Saver ETF (EERN) will both be actively managed by the YieldX team of portfolio managers and quantitative analysts, leveraging the firm’s unique analytics platform.
Both ETFs may hold a mixture of fixed income ETFs or individual securities that are compromised of investment grade, non-investment grade or unrated securities across several sub-sectors, such as sovereign, corporate and municipal debt in developing and emerging markets.
The DriveWealth Steady Saver ETF (STBL) is designed to generate monthly income at rates that are more attractive than those of money market funds or CDs. It has a target net annual yield of 3%, while also minimizing the risk relative to similarly yielding products.
STBL will be benchmarked to the Bloomberg Barclays US Universal Bond Index as the primary index, but will also use the YieldX Optimized Liquid Income Index as a secondary index. This benchmark is independently verified and calculated to produce higher yields with less volatility and an increased diversification.
STBL carries an expense ratio of 0.66%.
EERN: Diversify Equity Portfolios With Fixed Income
The DriveWealth Power Saver ETF (EERN) is designed to diversify an equity portfolio with an income-producing fixed income portfolio. The fund has a target net annual yield of 8%, also with monthly dividend distributions.
The fund will track the Bloomberg Barclays US Corporate High Yield Index as the primary benchmark and the YieldX Optimized Liquid Income Target 6% Volatility Index as the secondary index.
It is a Turbo Yield fund that uses YieldX’s algorithms and technology to select from classic fixed income securities to digital innovations and attempts to minimize risk while navigating volatility.
EERN carries an expense ratio of 1.49%.
About DriveWealth & YieldX
DriveWealth, a pioneer in fractional investing as well as embedded finance, built their API-driven, cloud based brokerage platform to help democratize access to U.S. equities for global investors. DriveWealth’s mission is to provide access to previously underserved and underrepresented retail investors to banks, global brands and fintech companies.
YieldX grants access to fixed income investing to everyone with their entirely digital, API-driven platform, one that utilizes analytic tools, AI and machine learning to deliver higher returns per unit of risk versus similar competitor benchmarks. Its pushbutton portfolio technology was created with advanced yield/risk optimization models at its core, allowing for tailored fixed income portfolios anywhere on the yield/risk spectrum.
“As a leader in embedded finance, DriveWealth is a great partner for YieldX. We are both technology-forward companies with a mission of making investing easy and accessible to retail investors everywhere. The DriveWealth ETFs are hoping to provide savers and retail investors access to income-generating investment strategies, underpinned by institutional grade portfolio construction, optimization, and risk analytics that have only been previously available to Wall Street clients—this is so powerful,” said Adam Green, CEO of YieldX.