NEW YORK - Virtus Newfleet Asset Management has expanded its investment offerings with the launch of the Virtus Newfleet Short Duration Core Plus Bond ETF (NYSE:SDCP) today. This new exchange-traded fund (ETF) is designed to navigate the fixed income market by investing in a diverse mix of short-duration debt securities.
The SDCP ETF aims to provide investors with high total returns and current income while seeking to minimize fluctuations in net asset value. The fund is actively managed and targets bonds with a duration of 1-3 years. It has the flexibility to invest in both high-yield and developed market debts, positioning itself to take advantage of yield opportunities across various fixed income sectors.
The strategic approach of SDCP involves active sector rotation, with Newfleet Asset Management, acting as the fund's sub-advisor, focusing on undervalued segments of the market. This includes evolving, specialized, and currently out-of-favor sectors. The fund charges an expense ratio of 35 basis points.
Speaking at Exchange 2023, Virtus ETF Solutions Income Strategist James Jessup highlighted the importance of "income" for investors, particularly in light of challenges such as an aging population and inflation which can erode purchasing power. Jessup also reflected on the previous year, noting that 2022 was a challenging period for fixed income investments.
In a broader market context, Todd Rosenbluth, head of research at VettaFi, observed significant interest in fixed income ETFs throughout 2023. These funds have attracted roughly 40% of new capital inflows despite representing only a fifth of the overall ETF market. This trend underscores the growing demand among investors for products like SDCP that offer potential income generation and risk-adjusted returns in a low-interest-rate environment.
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