On Wednesday, Newfleet Asset Management and Virtus ETF Solutions, both affiliates of Virtus Investment Partners, Inc. (NASDAQ: VRTS), introduced the Virtus Newfleet ABS/MBS ETF (NYSE: VABS), the third Virtus ETF strategy managed by Newfleet.
VABS seeks to generate income by investing primarily in short-duration, investment-grade securitized debt across asset-backed securities (ABS) and mortgage-backed securities (MBS), including commercial and residential MBS. By utilizing Newfleet’s disciplined, time-tested investment process and rigorous risk management approach, the actively managed ETF expects to invest in asset-backed and mortgage-backed securities with competitive yield and current income across undervalued areas of securitized credit markets.
“We believe active management is a better option in the ABS and MBS sectors of the securitized credit markets, and our approach provides a wider investment opportunity set and much-needed diversification relative to traditional fixed income,” said Newfleet President and Chief Investment Officer David L. Albrycht, CFA. “As the demand for shorter duration, income-generating strategies grows, we can employ our relative value approach to exploit market inefficiencies.”
“Virtus ETF Solutions has the platform to bring our expertise and experience in the niche securitized credit markets to investors in a low-cost, transparent vehicle,” said Albrycht, who will manage VABS along with Andrew Szabo, CFA, Nick Rinaldi, and Zachary Szyndlar, CFA, all of Newfleet. “Historically, investment-grade securitized credit has offered a yield advantage to its corporate bond counterparts.”
Newfleet managed $9.9 billion of fixed-income assets as of December 31, 2020, and applies its expertise in various multi-sector and dedicated strategies offered to institutional and individual fixed income investors. In addition to VABS, Newfleet also manages the Virtus Newfleet Dynamic Credit ETF (BLHY) and Virtus Newfleet Multi-Sector Bond ETF (NFLT).
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