The first nine days of June saw no launches of new alternative mutual funds or ETFs, but on June 10, a pair of new liquid alts debuted. One of them was the RiverFront Unconstrained Income ETF (NYSEARCA:RFUN), which Morningstar categorizes as a “nontraditional bond fund.”
Total Return Focus
Total return, with an emphasis on income as the source, is the new fund’s investment objective. RFUN seeks to achieve its objective by investing in a portfolio of fixed income securities of various maturities, ratings, and currency denominations from around the world. Allocations are made based on RiverFront’s analysis of economic and market conditions, as well as yield, maturity, credit, and currency considerations.
The fund employs various strategies across fixed income sectors. Its investments may include fixed income securities of all types, including convertible securities and preferred stock. Government-guaranteed securities, mortgage-backed securities (“MBS”), and junk bonds all fall within RFUN’s investment sphere, but no more than 20% of its assets may be invested in MBS, and no more than 50% in assets denominated in foreign currencies. The same 50% limit also applies to emerging markets.
The average maturity length of the fund’s portfolio will vary based on RiverFront’s assessment of the investing environment, which includes current and anticipated changes in interest rates. However, the prospectus says RiverFront intendes to manage the portfolio so it has an average duration of between two and ten years, under normal circumstances.
ALPS Advisors is the fund’s investment advisor. Sub-advisor RiverFront provides RFUN’s portfolio managers:
- Michael Jones, CFA, Chairman and CFO of the sub-advisor;
- Tim Anderson, CFA and Chief Fixed-Income Officer;
- Kevin Nicholson, CFA and Chief Risk Officer; and
- Rob Glowina, CFA and Fixed Income Analyst.
RFUN has a 0.51% management fee and no other expenses. As of June 22, almost two weeks after the fund’s launch, it had $5.02 million in assets under management, according to Morningstar.
For more information, read the fund’s prospectus.
Past performance does not necessarily predict future results.
Jason Seagraves contributed to this article.